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Universal Health (UHS) Q4 Earnings, Revenues Beat Estimates

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Universal Health Services Inc. UHS reported fourth-quarter 2017 adjusted earnings of $2.00 per share that surpassed the Zacks Consensus Estimate of $1.84 by 8.7%. Earnings also grew 11% year over year.

Net revenues increased 6.7% year over year to $2.64 billion in the fourth quarter, beating the Zacks Consensus Estimate of $2.63 billion.

Total operating expenses of $2.3 billion at the end of the fourth quarter increased 6.6% year over year.

Full-Year Update

For 2017, the company reported net income of $7.81 per share, up 9.3% year over year.

Universal Health’s net revenues came in at $10.41 billion, up 6.6% from 2016.

Total operating expenses were $9.1 billion, up 7.6% year over year.

Quarterly Segment Update

Acute Care Hospitals

Adjusted admissions and adjusted patient days increased 7.3% and 5.2%, respectively, from the prior-year quarter. Net revenues from acute care services climbed 6.5% in the fourth quarter.

Behavioral Hospitals

On a same facility basis, adjusted admissions increased 2.5% while adjusted patient days declined 0.7%, both on a year-over-year basis. Net revenues increased 1.6% during the quarter on a same facility basis.

Universal Health Services, Inc. Price, Consensus and EPS Surprise

Universal Health Services, Inc. Price, Consensus and EPS Surprise | Universal Health Services, Inc. Quote

Financial Update

As of Dec 31, 2017, the company had cash and cash equivalents of nearly $74.4 million, up 120% from year-end 2016.

Total assets were $10.8 billion as of Dec 31, 2017, up 4.3% from year-end 2016.

The company managed to lower its debt burden, as evident from its long-term debt of $3.5 billion as of Dec 31, 2017, down 13% from year-end 2016.

For 2017, net cash provided by operating activities decreased 11.3% to $1.18 billion year over year. 

Buyback Program

In November 2017, the board of directors authorized a $400 million increase in Universal Health’s stock repurchase program, which raised the aggregate authorization to $1.2 billion from $800 million approved during 2016 and 2014. 

During the fourth quarter, the company repurchased nearly 1 million shares at an aggregate cost of $100.8 million.

In 2017, the company repurchased approximately 2.96 million shares at an aggregate cost of approximately $322.2 million.

2018 Guidance

The company expects adjusted earnings per share to be within $9.25 to $9.90.

Revenues are expected in the range of $10.923 billion to $11.063 billion.

Zacks Rank & Performance of Peers

Universal Health presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among the other firms in the medical sector that have reported their fourth-quarter earnings so far, Centene Corp. CNC, Anthem Inc ANTM and UnitedHealth Group Inc. UNH beat their respective Zacks Consensus Estimate for earnings.

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