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HCA Holdings' Q3 Earnings In Line, Revs Up Y/Y

Zacks Equity Research

HCA Holdings Inc. (HCA) reported third-quarter 2013 operating net income of 79 cents per share, in line with the Zacks Consensus Estimate. However, the results exceeded the prior-year earnings by a couple of cents.

Several clinical and operating initiatives taken by the company in the face of a changing healthcare environment have helped to strengthen its bottom line during the quarter.

Quarterly Operational Update

Total revenues of HCA Holdings amounted to $8.46 billion, surpassing the Zacks Consensus Estimate of $8.42 billion by a mere 0.5%. Results also increased 4.9% from $8.06 billion reported in the prior-year quarter. The top-line growth is attributable to improvements in volume and greater revenue per equivalent admission.

Revenue per equivalent admission rose 3.9% on a same facility basis. Growth was aided by changes in payor mix and increasing acuity.

Same facility equivalent admissions increased 1.1% year over year during the reported quarter for HCA Holdings. Same facility admissions also rose 0.7% year over year in the quarter under review.

Operating expense per equivalent admission increased 3.1% year over in third quarter of 2013.

Total expenses of HCA Holdings came at $7.75 billion during the quarter, up 5% year over year. The increase in expenses was driven by higher salaries and benefits, supplies and other operating expenses.

Adjusted earnings before interest tax depreciation and amortization (:EBITDA) increased 4.6% year over year to $1.60 billion in the reported quarter.

HCA Holdings operated with 162 hospitals during the reported quarter, in line with the year ago quarter.

The company also operated in 114 freestanding outpatient surgery centers during the reported quarter, which is higher than 112 centers reported in the year ago quarter.

Quarterly Financial Update

HCA Holdings exited the third quarter of 2013 with total assets of $28.39 billion, up 1.1% from $28.07 billion at the end of 2012.

As of Sep 30, 2013, HCA Holdings had cash and cash equivalents of $484 million which increased 2.5% from the prior-year quarter-end level.

Net cash flow from operations came in at $900 million, surging 37.4% year over year. The improvement came on the back of favorable working capital changes and lower income taxes.

Long-term debt of HCA Holdings stood at $27.39 billion at the end of Sep, 2013. It improved 0.4% from Dec 31, 2012-level.

Share Repurchase

On Nov 1, 2013, HCA Holdings repurchased nearly 10.6 million shares for approximately $500 million from some of its sponsors using the draws under its revolving credit facilities.


HCA Holdings now expects its 2013 adjusted EBITDA to lie near the upper end of the previously announced guidance range of $6.25-$6.50 per share.


Tenet Healthcare Corp. (THC) reported third-quarter 2013 income from continuing operations of 45 cents per share that missed the Zacks Consensus Estimate of 46 cents per share. However, earnings improved from 33 cents earned in the year-ago quarter.

Universal Health Services Inc. (UHS) reported its third-quarter 2013 operating net income of $1.10 per share, surpassing the Zacks Consensus Estimate by 8.9%. The results also exceeded the prior-year quarter number by 20.9%.

Acadia Healthcare Company Inc. (ACHC) reported its third-quarter 2013 operating net income of 30 cents per share. Earnings beat the Zacks Consensus Estimate of 27 cents and also surged 76.5% year over year.

Zacks Rank

HCA Holdings presently holds a Zacks Rank #3 (Hold).

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