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Analysis

UHS Q3 Revenues Rise But Miss Estimates

By Jack O'Brien  
   October 26, 2018

The King of Prussia, Pennsylvania-based hospital management company put up strong financials but fell short of expectations and have narrowed their end-of-year guidance.

The hospital management company beat its estimated earnings per share (EPS) by 10.4%,  though it failed to match its estimated quarterly revenue of $2.66 billion.

Universal Health Services, Inc. (UHS) posted $2.23 EPS while just missing estimated revenues with $2.65 billion, according to its Q3 earnings report released Thursday afternoon.

As a result of the Q3 earnings announcement, UHS has accordingly revised its end of year guidance from $9.25 to $9.90 per diluted share down to $9.25 to $9.60. 

UHS' revenues were $30 million lower than Q2 2018 revenues, but did eclipse the company's Q3 2017 revenues, which reached $2.54 billion. 

Additionally, UHS' GAAP-adjusted net income was $208.8 million, eclipsing the $143.4 million in adjusted net income from Q3 2017.

The hospital management company from King of Prussia, Pennsylvania made the announcement after markets closed Thursday afternoon but subsequently saw its stock drop by more than 2.2% during early trading Friday morning.

Related: UHS Posts Modest Gains in Q2, Improves Revenues 2.6%

Additional UHS Q3 earnings report highlights:

  • The company saw an increase in the market value of shares classified for sale totalled $10.5 million in pre-tax unrealized gains.

  • However, UHS also registered a net unfavorable after-tax impact of $37.1 million, well above the $7.3 million reported in Q2, that resulted from a pre-tax increase in the reserve established in coordination with the Department of Justice (DOJ).

  • UHS' EBITDA totalled $377.7 million during Q3, surpassing the $363.4 million reported this time last year.

  • Through the first three quarters, UHS has reported a net income of $621.6 million, nearly $100 million more than they reported at the end of Q3 2017, while net revenues have increased 3.2% year-over-year.

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.


KEY TAKEAWAYS

UHS experienced growth for its net income and earnings per share, but just missed meeting its revenue expectations.

The company also slid on quarter-to-quarter revenues by $30 million though it put up strong year-over-year metrics.

Early morning trading was not favorable to the Thursday afternoon trading, as the stock slid more than 2.2%.

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