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Universal Health (UHS) Q2 Earnings Beat on Acute Care Strength
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Universal Health Services, Inc. (UHS - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of $4.31, which beat the Zacks Consensus Estimate by 27.9%. The bottom line rose 70.4% year over year from the year-ago period.
Net revenues amounted to $3.9 billion in the quarter under review, which rose from $3.6 billion a year ago. The top line outpaced the consensus mark by 1.5%.
The strong quarterly results of UHS were aided by continued growth in admissions at its acute care facilities, resulting in substantial contributions from the segment. Higher same-facility-adjusted patient days also contributed positively to the outcomes. However, the upside was partly offset by lower admissions in its behavioral healthcare facilities and higher expenses related to salaries, wages and benefits.
Universal Health Services, Inc. Price, Consensus and EPS Surprise
Adjusted EBITDA net of NCI rose 35.9% year over year to $578.7 million in the second quarterand came higher than our estimate of $472.7 million.
Total operating costs of $3.47 billion increased 6.2% year over year but missed our estimate of $3.48 billion.The figure rose due to higher salaries, wages and benefits, other operating expenses, supplies costs and lease and rental expenses.
Segmental Update
Acute Care Hospital Services
In the second quarter, adjusted admissions (adjusted for outpatient activity) increased 3.4% year over year on a same-facility basis but missed our growth estimate of 5.4%. Adjusted patient days rose 1.6% year over year. Net revenues stemming from Universal Health’s acute care services improved 6.6% year over year on a same-facility basis.
Behavioral Health Care Services
Adjusted admissions declined 0.4% year over year on a same-facility basis in the quarter under review. Meanwhile, adjusted patient days increased 1.4% year over year, lower than our model estimate of 1.9%. On a same-facility basis, net revenues derived from the behavioral healthcare services of UHS increased 11% year over year.
Financial Update (as of Jun 30, 2024)
Universal Health exited the second quarter with cash and cash equivalents of $128.8 million, which increased from $119.4 million at 2023-end. As part of the $1.2 billion revolving credit facility of UHS, net of outstanding borrowings and letters of credit, there remains an aggregate available borrowing capacity of $1.02 million at the second-quarter end.
Total assets of $14.07 billion inched up from the 2023-end figure of $13.97 billion.
Long-term debt amounted to $4.4 billion, which decreased from $4.8 billion as of Dec 31, 2023. Current maturities of long-term debt totaled $127.5 million.
Total equity increased from the 2023-end level of $6.2 billion to $6.6 billion.
In the second quarter of 2024, UHS generated cash flows from operations of $679.3 million, which increased from the prior-year quarter of $362.9 million. The growth came on the back of higher net income.
Share Repurchase Update
Universal Health bought back shares worth roughly $70 million in the second quarter. The company increased its share repurchase authorization by $1 billion and had a leftover repurchase capacity of around $1.2 billion as of Jul 24, 2024.
2024 Guidance Revised
Management increased its net revenue guidance between $15.565 billion and $15.753 billion for 2024.The midpoint of the outlook implies 9.6% growth from the 2023 reported figure.
Adjusted EBITDA, net of NCI, is now estimated to be in the range of $2.154-$2.226 billion. The midpoint of the guidance suggests a 25.7% improvement from the 2023 figure. UHS increased its adjusted EPS guidance in the range of $15.4-$16.2. The midpoint of the forecast indicates a rise of 49.9% from the 2023 figure.
Depreciation and amortization is now anticipated to be $592.5 million. Interest expenses are estimated at around $195.7 million. Capital expenditures are expected to be between $850 million and $1 billion for 2024.
Of the Medical sector players that have reported second-quarter 2024 results so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Elevance Health, Inc. (ELV - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported second-quarter 2024 adjusted EPS of $6.80, which beat the Zacks Consensus Estimate by 2.3%. The bottom line rose 10.7% year over year. Revenues amounted to $98.9 billion, which improved 6.4% year over year in the quarter under review on the back of strong performance in its UnitedHealthcare and Optum business lines. The top line outpaced the consensus mark of $98.7 billion.
Elevance Health reported second-quarter 2024 adjusted EPS of $10.12 per share, which outpaced the Zacks Consensus Estimate by 1.3%. The bottom line improved 12% year over year. Operating revenues of $43.2 billion dipped 0.4% year over year. However, the top line beat the consensus mark by 0.5%.
HCA Healthcare reported second-quarter 2024 adjusted EPS of $5.50, which beat the Zacks Consensus Estimate by 10.7%. The bottom line improved 28.2% year over year. Revenues amounted to $17.5 billion, which improved 10.3% year over year in the quarter under review. The top line outpaced the consensus mark by 2.2%.
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Universal Health (UHS) Q2 Earnings Beat on Acute Care Strength
Universal Health Services, Inc. (UHS - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of $4.31, which beat the Zacks Consensus Estimate by 27.9%. The bottom line rose 70.4% year over year from the year-ago period.
Net revenues amounted to $3.9 billion in the quarter under review, which rose from $3.6 billion a year ago. The top line outpaced the consensus mark by 1.5%.
The strong quarterly results of UHS were aided by continued growth in admissions at its acute care facilities, resulting in substantial contributions from the segment. Higher same-facility-adjusted patient days also contributed positively to the outcomes. However, the upside was partly offset by lower admissions in its behavioral healthcare facilities and higher expenses related to salaries, wages and benefits.
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
Adjusted EBITDA net of NCI rose 35.9% year over year to $578.7 million in the second quarterand came higher than our estimate of $472.7 million.
Total operating costs of $3.47 billion increased 6.2% year over year but missed our estimate of $3.48 billion.The figure rose due to higher salaries, wages and benefits, other operating expenses, supplies costs and lease and rental expenses.
Segmental Update
Acute Care Hospital Services
In the second quarter, adjusted admissions (adjusted for outpatient activity) increased 3.4% year over year on a same-facility basis but missed our growth estimate of 5.4%. Adjusted patient days rose 1.6% year over year. Net revenues stemming from Universal Health’s acute care services improved 6.6% year over year on a same-facility basis.
Behavioral Health Care Services
Adjusted admissions declined 0.4% year over year on a same-facility basis in the quarter under review. Meanwhile, adjusted patient days increased 1.4% year over year, lower than our model estimate of 1.9%. On a same-facility basis, net revenues derived from the behavioral healthcare services of UHS increased 11% year over year.
Financial Update (as of Jun 30, 2024)
Universal Health exited the second quarter with cash and cash equivalents of $128.8 million, which increased from $119.4 million at 2023-end. As part of the $1.2 billion revolving credit facility of UHS, net of outstanding borrowings and letters of credit, there remains an aggregate available borrowing capacity of $1.02 million at the second-quarter end.
Total assets of $14.07 billion inched up from the 2023-end figure of $13.97 billion.
Long-term debt amounted to $4.4 billion, which decreased from $4.8 billion as of Dec 31, 2023. Current maturities of long-term debt totaled $127.5 million.
Total equity increased from the 2023-end level of $6.2 billion to $6.6 billion.
In the second quarter of 2024, UHS generated cash flows from operations of $679.3 million, which increased from the prior-year quarter of $362.9 million. The growth came on the back of higher net income.
Share Repurchase Update
Universal Health bought back shares worth roughly $70 million in the second quarter. The company increased its share repurchase authorization by $1 billion and had a leftover repurchase capacity of around $1.2 billion as of Jul 24, 2024.
2024 Guidance Revised
Management increased its net revenue guidance between $15.565 billion and $15.753 billion for 2024.The midpoint of the outlook implies 9.6% growth from the 2023 reported figure.
Adjusted EBITDA, net of NCI, is now estimated to be in the range of $2.154-$2.226 billion. The midpoint of the guidance suggests a 25.7% improvement from the 2023 figure. UHS increased its adjusted EPS guidance in the range of $15.4-$16.2. The midpoint of the forecast indicates a rise of 49.9% from the 2023 figure.
Depreciation and amortization is now anticipated to be $592.5 million. Interest expenses are estimated at around $195.7 million. Capital expenditures are expected to be between $850 million and $1 billion for 2024.
Zacks Rank
Universal Health currently has a Zacks Rank #2 (Buy). 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 second-quarter 2024 results so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Elevance Health, Inc. (ELV - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported second-quarter 2024 adjusted EPS of $6.80, which beat the Zacks Consensus Estimate by 2.3%. The bottom line rose 10.7% year over year. Revenues amounted to $98.9 billion, which improved 6.4% year over year in the quarter under review on the back of strong performance in its UnitedHealthcare and Optum business lines. The top line outpaced the consensus mark of $98.7 billion.
Elevance Health reported second-quarter 2024 adjusted EPS of $10.12 per share, which outpaced the Zacks Consensus Estimate by 1.3%. The bottom line improved 12% year over year. Operating revenues of $43.2 billion dipped 0.4% year over year. However, the top line beat the consensus mark by 0.5%.
HCA Healthcare reported second-quarter 2024 adjusted EPS of $5.50, which beat the Zacks Consensus Estimate by 10.7%. The bottom line improved 28.2% year over year. Revenues amounted to $17.5 billion, which improved 10.3% year over year in the quarter under review. The top line outpaced the consensus mark by 2.2%.