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HCA Healthcare's (HCA) Earnings Miss in Q1, Decrease Y/Y

Zacks Equity Research

HCA Healthcare, Inc. HCA reported first-quarter 2020 adjusted earnings of $2.33 per share, missing the Zacks Consensus Estimate by 10.7%. Moreover, the bottom line declined 21.5% year over year due to lower patient volumes.

Quarterly Details

HCA Healthcare’s revenues of $12.8 billion lagged the Zacks Consensus Estimate by 1.6%. However, the top line was up 2.7% from the year-ago period.

Same facility equivalent admissions dipped 0.4% year over year while same facility admissions inched up 0.6%. Same facility revenue per equivalent admission also grew 1.6% year over year.

Same facility inpatient surgeries and same facility outpatient surgeries slid 1.8% and 5.9%, respectively, year over year due to the government-implemented rules to fight COVID-19.

Patient volumes across most services contracted in the last two weeks of the quarter.

Salaries and benefits, supplies and other operating expenses increased 6.8% year over year to $10.7 billion.

Adjusted EBITDA totaled $2.2 billion, down 13.4% year over year.

As of Mar 31, 2020, HCA Healthcare operated 186 hospitals.

HCA Healthcare, Inc. Price and EPS Surprise

HCA Healthcare, Inc. Price and EPS Surprise

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

Financial Update

As of Mar 31, 2020, the company had cash and cash equivalents of about $731 million, total debt of $34.86 billion and total assets worth $45.421 billion.

In the reported quarter, capex came in at $853 million minus acquisitions.

Cash flows provided by operating activities were $1.375 billion, up 41.2% year over year.

Dividend and Share Buyback Update

HCA Healthcare suspended its quarterly dividend program due to the COVID-19 effect and expects to resume it later.

In the quarter under review, HCA Healthcare bought back shares worth $441 million. As of Mar 31, 2020, it had shares of $2.8 billion left under its suspended buyback authorization.

Business Update

Due to the uncertainty related to the COVID-19 impact, the company withdrew its 2020 guidance.

Zacks Rank

HCA Healthcare carries a Zacks Rank #4 (Sell).

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

Upcoming Releases From Medical Sector

Some stocks worth considering from the medical sector with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Centene Corporation CNC has an Earnings ESP of +21.25% and a Zacks Rank of 2. The company is scheduled to release first-quarter earnings on Apr 28.

Anthem, Inc. ANTM is slated to announce first-quarter earnings on Apr 29. The stock has an Earnings ESP of +1.28% and a Zacks Rank #3.

MEDNAX, Inc. MD is set to report first-quarter earnings on May 7. The stock is #2 Ranked and has an Earnings ESP of +4.15%.

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