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Universal Health's (UHS) Q4 Earnings Beat Estimates, Up Y/Y

Zacks Equity Research

Universal Health Services Inc. UHS delivered fourth-quarter 2018 adjusted earnings of $2.37 per share, beating the Zacks Consensus Estimate by 0.9%. Moreover, the bottom line improved 18.5% year over year and the upside is mainly attributable to rising revenues.

Net revenues increased 4.2% year over year to $2.8 billion and also surpassed the Zacks Consensus Estimate by 2.6%, backed by higher admissions and patient days.

Total operating expenses of $2.5 billion at the end of the four-quarter increased 8.2% year over year, mainly due to salaries, wages and benefits along with other operating expense.

Segment Update

Acute Care Hospitals:


Adjusted admissions and adjusted patient days inched up 2.2% and 4.8%, respectively, from the prior-year quarter. Net revenues (on a same facility basis) climbed 4.7% in the fourth quarter, majorly aided by rise in admissions and patient days.

Behavioral Hospitals:

On same facility basis, adjusted admissions rose 4.5% while adjusted patient days dipped 1.2%, both on a year-over-year basis. Net revenues were up 2% during the quarter under review on same facility basis owing to higher admissions.

Financial Update

As of Dec 31, 2018, the company had cash and cash equivalents of nearly $105.2 million, up 41.4% from year-end 2017.

Total assets were $11 billion as of Dec 31, 2018, up 4.7% from year-end 2017.

The company’s long-term debt came in at $ 3.9 billion, up 12.6% from year-end 2017.

For 2018, net cash provided by operating activities totaled $1.3 billion, up 13.6% year over year.

Buyback Program

During the fourth quarter, the company bought back 1.22 million shares worth $149.3 million.

Moreover, last December, its board of directors authorized a $500-million jump from the existing share repurchase program.

In 2018, the company bought back shares worth $401.3 million.

Full-Year Highlights

For 2018, net revenues grew 3.5% to $10.8 billion. Adjusted net income of the year summed $9.53 per share, up 26.6% year over year.

2019 Outlook

Net revenues for the year are projected between $11.2 billion and $11.4 billion. Adjusted EPS for the year is estimated at $9.70- $10.40. Capital expenditures are expected between $675 million and $725 million.

Zacks Rank

Universal Health currently carries a Zacks Rank #4 (Sell).

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

Releases From the Medical Sector

Among other players from the medical sector having reported fourth-quarter earnings so far, the bottom-line results of Humana Inc. HUM, Centene Corporation CNC and Molina Healthcare, Inc MOH outpaced the respective Zacks Consensus Estimate.

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