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Analysis

UHS Misses Q1 Estimates, As CEO Earns 578-Times Median Salary

By Jack O'Brien  
   April 25, 2019

The hospital management company did not meet its earnings per share or revenue expectations.

Universal Health Services, Inc. (UHS) missed the mark on its estimates for earnings per share (EPS) and revenues, while its CEO made 578-times as much as the median employee salary.

The King of Prussia, Pennsylvania-based company achieved net revenues of $2.8 billion, missing estimates of $2.82 billion, while producing an EPS of $2.57, failing to meet its EPS estimate of $2.62, according to its Q1 earnings report released Thursday after markets closed.

UHS did report a net income of $234.2 million, up more than $10 million compared to Q1 2018, though the company experienced a pre-tax unrealized loss of $4.3 million. 

Related: UHS Posts Mixed Financials to End 2018

The company's EBITDA for Q1 was $452.7 million, up from $442.1 million this time last year, while net cash provided by operating activities decline by $19 million year-over-year, totalling $391 million. 

The company repurchased more than 840,000 shares at an aggregate cost of $106.3 million, part of a December 2018 decision to increase the stock repurchase program by $500 million, raising the total to $1.7 billion.

UHS' quarterly earnings report comes three weeks after the company filed documents with the SEC detailing a rise in the CEO-to-median employee pay ratio. 

Alan B. Miller, who founded UHS in 1979, received $23.58 million in total compensation, including a base salary of $1.6 million and a $1 million bonus.  

The median UHS employee salary in 2018 was $40,826. 

Related: Median UHS Employee Earned 0.18% As Much As CEO Alan Miller in 2017

In 2017, the CEO-to-median employee pay ratio at UHS was 541:1, while the ratio for 2018 increased to 578:1.

Miller's salary for 2019 is slated to be $1.7 million, a 2.1% increase over his 2018 salary.

ADDITIONAL UHS Q1 EARNINGS REPORT HIGHLIGHTS:

  • During Q1, capital expenditures were just shy of $170 million, down from $189 million this time last year.
  • However, the company did report a favorable after-tax impact of $10.9 million.
  • Adjusted admissions for acute care services increased 4.9% year-over-year and adjusted patient days increased 4.4%. 

For complete financial information, review UHS' filing with the Securities and Exchange Commission.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: Milan, Italy - November 1, 2017: Universal Health Services logo on the website homepage. - Image / Editorial credit: Casimiro PT / Shutterstock.com


KEY TAKEAWAYS

Net revenues and earnings per share both barely missed industry estimates.

UHS reported a net income of $234.2 million, up more than $10 million, though the company experienced a pre-tax unrealized loss of $4.3 million. 

Alan B. Miller, who founded UHS in 1979, received $23.58 million in total compensation, including a base salary of $1.6 million and a $1 million bonus.  

The median UHS employee salary in 2018 totalled $40,826, resulting in a CEO-to-median employee pay ratio of 578:1. 

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