HCA beats quarterly profit estimates despite weaker flu season volume
By Siddhi Mahatole and Christy Santhosh
April 24 Reuters) - HCA Healthcare narrowly beat Wall Street estimates for first-quarter profit on Friday but faced a dip in patient admissions during the flu season, sending shares of the hospital operator down 8%.
As enhanced subsidies under Affordable Care Act plans phase out, hospital operators are seeing lower volumes for elective care, preventive visits and diagnostics. Rising uncompensated care from a higher share of uninsured patients is also pressuring margins.
HCA said it did not experience a typical volume increase associated with the flu season as respiratory-related admissions fell 42%, and respiratory-related emergency room visits were down 32% year-over-year.
A winter storm in January also negatively impacted first-quarter volumes in some of the hospital operator's markets including Texas, Tennessee, North Carolina, and Virginia.
"We view these factors as being temporal and not structural," said Chief Financial Officer Michael Marks, adding that the impact of these two factors adversely impacted adjusted EBITDA by an estimated $180 million.
Barclays analyst Andrew Mok warned the results marked a "somewhat concerning start to the year", especially if Affordable Care Act and commercial pressures worsen.
HCA was able to offset the drag from lower volumes, it said, with the help of certain Medicaid supplemental payment programs, which can lift patient reimbursement above base Medicaid rates and support managed-care hospital revenue.
The company also maintained its annual forecasts.
J.P.Morgan analyst Benjamin Rossi said the decision fits with HCA's commentary in recent years regarding an intention to avoid outlook adjustments after the first quarter, particularly given seasonally slower volumes early in the year.
Revenue per equivalent admission at same facilities - a measure combining inpatient and outpatient volumes - rose 3.1%.
The company earned adjusted profit of $7.15 per share, compared with analysts' estimates of $7.14 per share, according to data compiled by LSEG.
Total revenue for the first quarter came in at $19.11 billion, slightly beating estimates of $19.10 billion.
(Reporting by Siddhi Mahatole and Christy Santhosh in Bengaluru; Editing by Devika Syamnath)