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HCA Healthcare (HCA) Q2 Earnings Beat on Better Patient Volumes

HCA Healthcare, Inc. HCA reported second-quarter 2022 adjusted earnings of $4.21 per share, which outpaced the Zacks Consensus Estimate by 14.7%. However, the bottom line declined 3.7% year over year.

The quarterly results were driven by sound revenue growth, courtesy of gradual recovery in patient volumes and better same-facility emergency room visits. However, the upside was partly offset by escalating costs linked with salaries and benefits, and other operating expenses.

HCA Healthcare, Inc. Price, Consensus and EPS Surprise

HCA Healthcare, Inc. Price, Consensus and EPS Surprise
HCA Healthcare, Inc. Price, Consensus and EPS Surprise

HCA Healthcare, Inc. price-consensus-eps-surprise-chart | HCA Healthcare, Inc. Quote

Quarterly Details

Revenues of HCA Healthcare amounted to $14.8 billion, which increased 2.7% year over year in the second quarter. Yet, the top line missed the consensus mark by a whisker.

Same facility equivalent admissions inched up 0.5% year over year while same facility admissions dipped 1.2% year over year. Same facility revenue per equivalent admission rose 3.5% year over year in the quarter under review.

Same facility inpatient surgeries and same facility outpatient surgeries declined 2.3% and 1.4%, respectively, year over year. Meanwhile, same facility emergency room visits improved 7.3% year over year in the second quarter.

Salaries and benefits, supplies and other operating expenses escalated 4.9% year over year to $11.8 billion.

Adjusted EBITDA declined 5.5% year over year to more than $3 billion in the quarter under review.

HCA Healthcare operated 182 hospitals and around 2,300 ambulatory sites of care across 20 states and the U.K. as of Jun 30, 2022.

Financial Update (as of Jun 30, 2022)

HCA Healthcare exited the second quarter with cash and cash equivalents of $858 million, which plunged 40.9% from the 2021-end level. At the end of the second quarter, HCA had $2.7 billion available under its credit facilities.

Total assets of $51.6 billion increased 1.7% from the level at the 2021 end.

Long-term debt, less debt issuance costs and discounts amounted to $38.7 billion, which increased 12.6% from the figure as of Dec 31, 2021.

In the reported quarter, capex totaled nearly $1.1 billion minus acquisitions.

Net cash provided by operating activities during the second quarter declined 27.6% year over year to $1.6 billion.

Share Repurchase and Dividend Update

HCA Healthcare bought back shares worth $2.7 billion in the second quarter. As of Jun 30, 2022, it had $3.8 billion left under its buyback authorization.

Management approved a quarterly cash dividend of 56 cents per share on its common stock. The dividend will be paid on Sep 30, 2022, to its shareholders of record as of Sep 16.

2022 View

Earlier, management had provided guidance for certain metrics.

Annual revenues were expected to lie within $59.5-$61.5 billion, the mid-point of which indicates a rise of 3% from the 2021 figure. Adjusted EBITDA was anticipated between $11.8 billion and $12.4 billion, the mid-point of which suggests a 4% decline from the reported figure of 2021.

HCA Healthcare projected 2022 diluted EPS to lie within the $16.40-$17.60 band. The mid-point of the outlook implied a decline of 19.7% from the 2021 figure.

Also, the management earlier expected capex, excluding acquisitions, at around $4.2 billion for 2022. The figure reflected a rise of 17% from the 2021 figure.

Zacks Rank

HCA Healthcare has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the Medical sector players that have reported second-quarter results so far, the bottom lines of UnitedHealth Group Incorporated UNH, Elevance Health Inc. ELV and Tenet Healthcare Corporation THC beat the Zacks Consensus Estimate.

UnitedHealth Group reported second-quarter 2022 adjusted earnings of $5.57 per share, which beat the Zacks Consensus Estimate by 6.3%. The bottom line improved 19% year over year. Revenues of UNH were $80.3 billion, which climbed 13% year over year in the second quarter. The top line outpaced the consensus mark by 0.9%. The medical care ratio of UnitedHealth Group improved 130 basis points (bps) year over year to 81.5% during the quarter under review.

Elevance Health’s second-quarter 2022 earnings of $8.04 per share outpaced the Zacks Consensus Estimate of $7.72. The bottom line improved 14.4% year over year. Operating revenues of Elevance Health in the second quarter totaled $38,482 million, which rose 15.6% year over year. The top line beat the consensus mark of $38,120 million. As of Jun 30, 2022, medical enrollment of ELV amounted to roughly 47.1 million, which grew 6.1% year over year.

Tenet Healthcare reported second-quarter 2022 adjusted diluted earnings of $1.50 per share, which beat the Zacks Consensus Estimate by a whopping 108.3%. However, the bottom line declined 6% year over year. Tenet Healthcare’s net operating revenues of $4.7 billion fell 6.4% year over year in the second quarter. The top line missed the consensus mark by 4.1%. THC's operating expenses of $4.2 billion decreased 4.7% year over year.


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