Universal Health (UHS) Q3 Earnings, Revenues Lag Estimates

Universal Health Services Inc. (UHS - Free Report) reported third-quarter 2017 adjusted earnings of $1.64 per share that missed the Zacks Consensus Estimate by 3.5%. Earnings, however, grew 2.5% year over year.

Including one-time items like (i) an unfavorable after-tax impact of approximately 9 cents to 10 cents per diluted share, stemming from the hurricane expenses and estimated business interruption impact incurred by 28 behavioral health care facilities and three acute care hospitals located in Florida, (ii) an after-tax charge of 5 cents per diluted share related to a court order in Texas related to certain litigation and (iii) 1 cent of favorable impact of ASU 2016-09 and (iv) 3 cents of unfavorable after-tax impact of items related to Electronics Health Records, net income per share comes at $1.47 for the third quarter, down 4.5% year over year.

Net revenues increased 5.5% year over year to $2.54 billion. It, however, missed the Zacks Consensus Estimate by 2%.

Total operating expenses of $2.3 billion at the end of the third quarter also increased 7.1% year over year.

Segment Update

Acute Care Hospitals:

Adjusted admissions and adjusted patient days increased 3.5% and 1.5%, respectively, from the prior-year quarter. Net revenues from acute care services climbed 2.2% in the third quarter.

Behavioral hospitals:

On a same facility basis, adjusted admissions increased 1.1% while adjusted patient days declined 0.2%, both on a year-over-year basis. Net revenues increased 1.8% during the quarter on a same facility basis.

Universal Health Services, Inc. Price, Consensus and EPS Surprise

 Financial Update

As of Sep 30, 2017, the company had cash and cash equivalents of nearly $65.4 million, up 94% from year-end 2016.

Total assets were $10.6 billion as of Sep 30, 2017, up 3.1% from year-end 2016.

The company managed to lower its debt burden, as evident from its long-term debt of $3.9 billion as of Sep 30, 2017 that declined 1% from year-end 2016.

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