HCA Healthcare shares fell as much as 2.4% in early trading Friday after the hospital operator forecasted a drop in full-year profit as it expects widespread inflation and the impact of the COVID-19 pandemic to continue weighing on earnings.
The hospital operator said in a statement on Friday that it expects net income to fall from $5.6 billion in 2022 to a range of $4.5 billion to $4.9 billion this year. The company also forecasted revenue to edge up to $61.5 billion to $63.5 billion from $60 billion last year.
Hospitals have been battered by lowered volumes, increased staffing shortages and labor strikes during the COVID-19 pandemic. A recent quarterly Moody’s report said that hospitals should expect staffing woes to continue during the first quarter and anticipated an effect on hospital earnings this year due to state Medicaid eligibility checks resuming April 1.
Fourth-quarter results for HCA were generally in-line or slightly below Wall Street estimates, according to SVB Securities and investment banking firm Cowen.
HCA, one of the nation’s largest for-profit operators, reported $15.5 billion in fourth-quarter revenue and $2 billion in total net income. The hospital operator reported $15 billion in revenue and $1.8 billion in total net income in the year-earlier period.
Same facility admissions increased 2.9% and same facility equivalent admissions rose 5.4%.
HCA CEO Sam Hazen said in the earnings statement that the last three years of the COVID-19 pandemic “truly a challenge like no other” in a statement.
The hospital operator reported a 0.1% decline in inpatient and a 0.3% drop in outpatient surgeries in the fourth quarter. Same facility revenue fell 2.6% year-over-year, with HCA citing a continued impact of higher COVID-19 volumes reported during the prior year.
At the same time, the company reported “progress in the labor agenda” in the fourth quarter, despite an increase in salary and benefit expenses as a percentage of revenue year-over-year.
Registered nursing turnover decreased 26% in the quarter, compared to the average of the previous four quarters, according to Hazen, who added that contract labor utilization was also decreasing.
By mid-morning, HCA shares recovered and were trading 1.2% higher.