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HCA Healthcare (HCA) Q1 Earnings Miss, Trims '22 EPS View

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·4 min read
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HCA Healthcare, Inc. HCA reported first-quarter 2022 adjusted earnings of $4.12 per share, which missed the Zacks Consensus Estimate by 3.5%. The bottom line declined 0.5% year over year.

HCA's quarterly results were impacted by escalating expenses related to salaries and benefits, supplies and other operating expenses. However, the downside was partly offset by higher revenues stemming from solid patient volumes.

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 improved nearly 7% year over year to $14.9 billion in the quarter under review. The top line beat the consensus mark by 1.6%.

Same facility equivalent admissions rose 5% year over year while same facility admissions grew 2.1% year over year. Same facility revenue per equivalent admission improved 2.7% year over year in the first quarter.

Same facility inpatient surgeries and same facility outpatient surgeries were up 0.8% and 6.8%, respectively, year over year.

Salaries and benefits, supplies and other operating expenses climbed 9.7% year over year in the quarter under review.

Adjusted EBITDA of $2.9 billion slipped 3.5% year over year.

As of Mar 31, 2022, HCA Healthcare operated 182 hospitals and around 2,300 ambulatory sites of care.

Financial Update (as of Mar 31, 2022)

HCA Healthcare exited the first quarter with total assets of $52.2 billion, which increased 2.9% from the level at 2021 end.

Long-term debt, less debt issuance costs and discounts amounted to $36.2 billion, up 5.4% from the 2021-end level.

In the reported quarter, capex totaled $861 million minus acquisitions.

Net cash provided by operating activities during the first quarter was $1.3 billion, which slumped 32.3% year over year.

Share Repurchase and Dividend Update

In the first quarter, HCA Healthcare bought back shares worth $2.1 billion. As of Mar 31, 2022, the healthcare provider had $6.5 billion left under its buyback authorization.

HCA declared a quarterly cash dividend of 56 cents per share on its common stock, which will be paid on Jun 30, 2022, to its shareholders of record on Jun 16.

2022 Outlook Revised

Concurrent with first-quarter results, HCA Healthcare altered its guidance for 2022.

Management anticipates annual revenues in the band of $59.5-$61.5 billion, lower than the prior view of $60-$62 billion.

Adjusted EBITDA is anticipated to be between $11.8 billion and $12.4 billion, down from the previous view of $12.55-$13.05 billion.

HCA Healthcare expects diluted EPS to lie within $16.40-$17.60 per share, lower than the prior guidance of $18.40-$19.20.

Earlier, for 2022, management expected capex, excluding acquisitions, at around $4.2 billion.

Zacks Rank

HCA Healthcare currently carries a Zacks Rank #3 (Hold). 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 reported first-quarter results so far, the bottom line of UnitedHealth Group Incorporated UNH and Anthem, Inc. ANTM beat the Zacks Consensus Estimate.

UnitedHealth Group reported first-quarter 2022 earnings of $5.49 per share, which outpaced the Zacks Consensus Estimate by 1.7%. UNH’s bottom line improved 3.4% year over year, courtesy of growing revenues. Revenues of UnitedHealth Group were $80.1 billion, which climbed 14.2% year over year and beat the Zacks Consensus Estimate by 1.9%.

Anthem reported first-quarter 2022 earnings of $8.25 per share, which outpaced the Zacks Consensus Estimate of $7.81 by 5.6%. ANTM’s bottom line improved 17.7% year over year. Operating revenues of Anthem in the first quarter totaled $37.9 billion, which rose 18% year over year and surpassed the consensus mark by 1.4%.

Upcoming Releases

Here is a company worth considering from the medical space as our model shows that this has the right combination of elements to beat on earnings this reporting cycle:

Avanos Medical, Inc. AVNS has an Earnings ESP of +4.17% and a Zacks Rank #1, currently. The Zacks Consensus Estimate for Avanos Medical’s first-quarter 2022 earnings is pegged at 24 cents, which indicates a 4.4% increase from the prior-year quarter’s reported figure.

AVNS beat earnings estimates in two of the trailing four quarters and missed twice.


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