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Universal Health (UHS) Q3 Earnings Top on Better Patient Volumes
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Universal Health Services, Inc. (UHS - Free Report) reported third-quarter 2022 adjusted earnings of $2.54 per share, which beat the Zacks Consensus Estimate by 5.8%. However, the bottom line fell 4.9% year over year.
UHS’ quarterly results benefited from higher patient admissions at its acute care and behavioral health care facilities. Despite seeing an uptrend, growth in patient volumes in the behavioral health care segment was partly offset by the issue of shortage of nurses and other medical personnel that continues to grapple most U.S. healthcare providers.
Consequently, the margins of Universal Health took a hit as it had to incur elevated labor costs in the form of recruiting expensive temporary personnel or raising wages and benefits to attract and retain nurses and other clinical staff to counter the staffing scarcity.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
Net revenues of $3.3 billion improved 5.7% year over year in the third quarter. The top line outpaced the consensus mark by a whisker.
Adjusted earnings before interest, taxes, depreciation & amortization (EBITDA), net of net income attributable to noncontrolling interests (NCI), declined 4.6% year over year to $427.8 million.
Total operating costs of $3.1 billion increased 7.7% year over year, primarily due to higher salaries, wages and benefits, other operating expenses, and depreciation and amortization.
Segmental Update
Acute Care Hospital Services
In the third quarter, adjusted admissions (adjusted for outpatient activity) rose 1.9% year over year on a same-facility basis, while adjusted patient days declined 5% year over year. Net revenues stemming from Universal Health’s acute care services inched up 0.9% year over year on a same-facility basis.
Behavioral Health Care Services
Adjusted admissions improved 4% year over year on a same-facility basis in the quarter under review, while adjusted patient days grew 3.3% year over year. Net revenues derived from behavioral health care services of UHS advanced 8.4% year over year.
Financial Update (as of Sep 30, 2022)
Universal Health exited the third quarter with cash and cash equivalents of $74.6 million, which plunged 35.3% from the 2021-end level.
Within its $1.2-billion revolving credit facility, net of outstanding borrowings and letters of credit, UHS had $1 billion of aggregate available borrowing capacity at the third-quarter end.
Total assets increased 2.2% from the 2021-end level to $13.4 billion.
Long-term debt of $4.6 billion escalated 12% from the figure at 2021 end.
Total equity amounted to $5.9 billion, which dropped 4.7% from the level as of Dec 31, 2021.
During the first nine months ended Sep 30, 2022, net cash provided by operating activities of nearly $699 million improved 24.4% from the prior-year comparable period’s level. Significant growth came on the back of a favorable change from the early return of Medicare-accelerated payments received in 2020 and repaid in first-quarter 2021.
Share Repurchase Update
Universal Health bought back around 1.6 million shares worth $157.9 million. UHS had $1.1 billion left under its total repurchase authorization as of Sep 30, 2022.
2022 Guidance
Earlier, management anticipated net revenues to be $13.235-$13.371 billion for this year, the midpoint of which implies 5.2% growth from the 2021 figure.
Adjusted EBITDA, net of NCI, was estimated within $1.635-$1.712 billion. The midpoint of the outlook indicates an 11.9% decline from the reported figure of 2021.
UHS expected adjusted earnings per share for 2022 in the range of $9.60-$10.40, the mid-point of which suggests a 15.4% drop from the 2021 reported figure.
Of the Medical sector players that have reported third-quarter results so far, the bottom line results of UnitedHealth Group Incorporated (UNH - Free Report) , Centene Corporation (CNC - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the respective Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter 2022 adjusted earnings of $5.79 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line improved from $4.52 per share a year ago. Revenues of UNH were $80.9 billion in the third quarter, which climbed from $72.3 billion a year ago. The top line outpaced the consensus mark of $80.7 billion. The medical care ratio of UnitedHealth Group improved 140 basis points year over year to 81.6% during the quarter under review.
Centene’s third-quarter 2022 adjusted earnings per share of $1.30 outpaced the Zacks Consensus Estimate by 6.6%. The bottom line grew 3.2% year over year. CNC’s revenues of $35.9 billion advanced 11% year over year in the quarter under review and also beat the consensus mark by 1.1%. Premiums of $31.8 billion rose 10.3% year over year in the quarter under review, while service revenues climbed 14.7% year over year to $1.9 billion.
HCA Healthcare reported third-quarter 2022 adjusted earnings of $3.93 per share, which beat the Zacks Consensus Estimate by 1%. However, the bottom line dropped 14% year over year. Revenues of HCA decreased 2% year over year to $15 billion in the third quarter and missed the consensus mark by a whisker. Same-facility equivalent admissions rose 2.3% year over year in the third quarter, while same-facility admissions fell 1.5% year over year.
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Universal Health (UHS) Q3 Earnings Top on Better Patient Volumes
Universal Health Services, Inc. (UHS - Free Report) reported third-quarter 2022 adjusted earnings of $2.54 per share, which beat the Zacks Consensus Estimate by 5.8%. However, the bottom line fell 4.9% year over year.
UHS’ quarterly results benefited from higher patient admissions at its acute care and behavioral health care facilities. Despite seeing an uptrend, growth in patient volumes in the behavioral health care segment was partly offset by the issue of shortage of nurses and other medical personnel that continues to grapple most U.S. healthcare providers.
Consequently, the margins of Universal Health took a hit as it had to incur elevated labor costs in the form of recruiting expensive temporary personnel or raising wages and benefits to attract and retain nurses and other clinical staff to counter the staffing scarcity.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
Universal Health Services, Inc. price-consensus-eps-surprise-chart | Universal Health Services, Inc. Quote
Quarterly Operational Update
Net revenues of $3.3 billion improved 5.7% year over year in the third quarter. The top line outpaced the consensus mark by a whisker.
Adjusted earnings before interest, taxes, depreciation & amortization (EBITDA), net of net income attributable to noncontrolling interests (NCI), declined 4.6% year over year to $427.8 million.
Total operating costs of $3.1 billion increased 7.7% year over year, primarily due to higher salaries, wages and benefits, other operating expenses, and depreciation and amortization.
Segmental Update
Acute Care Hospital Services
In the third quarter, adjusted admissions (adjusted for outpatient activity) rose 1.9% year over year on a same-facility basis, while adjusted patient days declined 5% year over year. Net revenues stemming from Universal Health’s acute care services inched up 0.9% year over year on a same-facility basis.
Behavioral Health Care Services
Adjusted admissions improved 4% year over year on a same-facility basis in the quarter under review, while adjusted patient days grew 3.3% year over year. Net revenues derived from behavioral health care services of UHS advanced 8.4% year over year.
Financial Update (as of Sep 30, 2022)
Universal Health exited the third quarter with cash and cash equivalents of $74.6 million, which plunged 35.3% from the 2021-end level.
Within its $1.2-billion revolving credit facility, net of outstanding borrowings and letters of credit, UHS had $1 billion of aggregate available borrowing capacity at the third-quarter end.
Total assets increased 2.2% from the 2021-end level to $13.4 billion.
Long-term debt of $4.6 billion escalated 12% from the figure at 2021 end.
Total equity amounted to $5.9 billion, which dropped 4.7% from the level as of Dec 31, 2021.
During the first nine months ended Sep 30, 2022, net cash provided by operating activities of nearly $699 million improved 24.4% from the prior-year comparable period’s level. Significant growth came on the back of a favorable change from the early return of Medicare-accelerated payments received in 2020 and repaid in first-quarter 2021.
Share Repurchase Update
Universal Health bought back around 1.6 million shares worth $157.9 million. UHS had $1.1 billion left under its total repurchase authorization as of Sep 30, 2022.
2022 Guidance
Earlier, management anticipated net revenues to be $13.235-$13.371 billion for this year, the midpoint of which implies 5.2% growth from the 2021 figure.
Adjusted EBITDA, net of NCI, was estimated within $1.635-$1.712 billion. The midpoint of the outlook indicates an 11.9% decline from the reported figure of 2021.
UHS expected adjusted earnings per share for 2022 in the range of $9.60-$10.40, the mid-point of which suggests a 15.4% drop from the 2021 reported figure.
Zacks Rank
Universal Health 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 have reported third-quarter results so far, the bottom line results of UnitedHealth Group Incorporated (UNH - Free Report) , Centene Corporation (CNC - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the respective Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter 2022 adjusted earnings of $5.79 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line improved from $4.52 per share a year ago. Revenues of UNH were $80.9 billion in the third quarter, which climbed from $72.3 billion a year ago. The top line outpaced the consensus mark of $80.7 billion. The medical care ratio of UnitedHealth Group improved 140 basis points year over year to 81.6% during the quarter under review.
Centene’s third-quarter 2022 adjusted earnings per share of $1.30 outpaced the Zacks Consensus Estimate by 6.6%. The bottom line grew 3.2% year over year. CNC’s revenues of $35.9 billion advanced 11% year over year in the quarter under review and also beat the consensus mark by 1.1%. Premiums of $31.8 billion rose 10.3% year over year in the quarter under review, while service revenues climbed 14.7% year over year to $1.9 billion.
HCA Healthcare reported third-quarter 2022 adjusted earnings of $3.93 per share, which beat the Zacks Consensus Estimate by 1%. However, the bottom line dropped 14% year over year. Revenues of HCA decreased 2% year over year to $15 billion in the third quarter and missed the consensus mark by a whisker. Same-facility equivalent admissions rose 2.3% year over year in the third quarter, while same-facility admissions fell 1.5% year over year.