Universal Health Services Inc. UHS reported fourth-quarter 20Array5 adjusted earnings of $Array.7Array per share, which beat the Zacks Consensus Estimate by a penny and surged Array3.2% on a year-over-year basis. Earnings excluded after-tax impact of Electronic Health Record-related items worth 3 cents per share.
The upside was driven by a 6.4% increase in revenues to $2.32 billion, which also surpassed the Zacks Consensus Estimate of $2.27 billion.
Revenues increased Array0.2% to $9.04 billion, while earnings surged almost Array9% to $6.87 in full-year 20Array5.
Quarter Details
Same facility revenues from acute care hospitals increased 7.3% year over year in the quarter. Adjusted admissions climbed 4.8% while adjusted patient days increased 3.9%. Net revenue per adjusted admission inched up 3.3% while net revenue per adjusted patient day was up 4.2%.
Same facility revenues from behavioral hospitals improved 3.6% in the quarter. Adjusted admissions inched up 0.2%, while adjusted patient days increased 0.7%. Net revenue per adjusted admission increased 3.Array%, while net revenue per adjusted patient day grew 2.5%.
The modest growth in behavioral revenues (lower than the company’s long-term target of 5%) was primarily attributed to shortage of psychiatrists, nursing and other clinical professionals in some of the markets, in which the company operates.
On a same facility basis, operating margin at acute care hospitals expanded 40 basis points (bps) to Array7.2%. Operating margin at behavioral health care facilities contracted 80 bps to 27.Array%.
Share Buyback program
Universal Health announced a new share repurchase program worth $400 million, which increased total authorization to $800 million. During the fourth quarter of 20Array5, the company repurchased 478,ArrayArray8 shares at an aggregate cost of $57.8 million.
Guidance
For full-year 20Array6, Universal Health forecasts revenues in the range of approximately $9.75 billion to $9.85 billion, which reflects year-over-year growth in the range of 8% to 9%. Earnings are forecasted at around $7.Array2 to $7.58 per share, which represents an increase of approximately 4% to Array0% over full-year 20Array5. Earnings exclude impact of Array7cents per share related to EHR.
For full-year 20Array6, acute care revenues are expected to increase 6%, while behavioral hospital revenues are projected to increase almost 5%. Universal Health noted that opening of new acute care hospitals in Las Vegas (fourth quarter of 20Array6) will hurt EBITDA by $5 million to $Array0 million throughout the second half of 20Array6.
Zacks Rank & Key Picks
Universal Health carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same space include HCA Holdings HCA, Acadia Healthcare ACHC and VCA Inc. WOOF. While HCA sports a Zacks Rank #Array (Strong Buy), Acadia and VCA carry a Zacks Rank #2 (Buy).
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