HCA net income soars 78% despite hurricanes
- HCA Healthcare beat analyst expectations for revenue in its third quarter, revised its guidance for the year and announced a quarterly cash dividend of $0.35 per share in third quarter earnings released Tuesday.
- The Nashville-based hospital chain said net income spiked 78% to $759 million during the third quarter on revenue of $11.45 billion, an increase of nearly 7% for the quarter.
- HCA improved its guidance and expects revenue to be between $46 and $47 billion for the year compared to previous guidance that projected revenue to be between $45.5 to $46.5 billion. Earnings per share are now expected to be between $9.05 to $9.45 per diluted share from previous expectations of $9 to $9.40 per diluted share.
HCA had a strong third quarter — reporting an uptick in admissions and surgeries — despite the hurricanes that disrupted business at some of its facilities in recent months.
On what will be his final earnings call with investors, CEO R. Milton Johnson, who is set to retire at the end of the year, said, "we saw solid volume and rate growth, increased intensity of service and excellent expense management."
HCA said admissions increased 3.2% year over year while outpatient surgeries and inpatient surgeries increased nearly 5% and 1.1%, respectively. It's the 18th consecutive quarter of increased same-facility admissions, executives said on the call. However, same-facility ER visits declined slightly by 0.4%.
Hurricane Florence resulted in an estimated $9 million hit to the hospital chain after it was forced to evacuate every patient from its Grand Strand Medical Center in Myrtle Beach, South Carolina.
Executives did note that results from Q3 of last year were weighed down by Hurricanes Harvey and Irma, resulting in revenue losses of $140 million. "Our robust disaster preparedness plans give us confidence when facing weather disasters like this," Johnson said.
Looking ahead to 2019, incoming CEO Sam Hazen said the company expects to see solid growth again.
The hospital chain reported a tax benefit of $121 million, or $0.34 per share, thanks to recent tax legislation.
In September, HCA, which operates 178 hospitals and 122 outpatient surgery centers, said it signed a $1.5 billion deal to buy Mission Health, a North Carolina health system with seven facilities, its largest in Asheville.
Despite HCA's strong performance, Community Health Systems, which also reported earnings Tuesday, struggled with 12.4% fewer admissions and a net loss of $110 million.