10-QPeriod: Q1 FY2018

HCA Healthcare, Inc. Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 8, 2018For Securities:HCA

Summary

HCA Healthcare, Inc. reported strong financial performance for the first quarter of 2018, with revenues increasing by 7.5% year-over-year to $11.423 billion. Net income attributable to HCA Healthcare, Inc. saw a significant increase of 73.5% to $1.144 billion, or $3.18 per diluted share, compared to $659 million, or $1.74 per diluted share, in the prior year period. This robust growth was driven by a combination of increased patient volumes (equivalent admissions up 4.6%) and higher revenue per equivalent admission (up 2.9%). The company also benefited from a substantial one-time gain of $405 million from the sale of facilities and a lower effective tax rate due to the Tax Cuts and Jobs Act. Operationally, HCA demonstrated consistent volume growth across key metrics, including admissions and emergency department visits. The company also continued its strategic initiatives, including acquisitions and share repurchases, while managing its capital structure effectively. Despite facing ongoing healthcare industry challenges, HCA's performance indicates strong operational execution and favorable market dynamics in the reported quarter.

Financial Highlights

46 data points
Beta

Revenue

$11.42B

Net Income

$1.14B

10.0% Net Margin

EPS (Diluted)

$3.18

Total Assets

$37.30B

Cash & Equivalents

$1.09B

Free Cash Flow

$589.00M

Financial Statements
Beta
Revenue$11.42B
Operating Expenses$9.88B
Interest Expense$431.00M
Net Income$1.14B
EPS (Basic)$3.26
EPS (Diluted)$3.18
Shares Outstanding (Basic)350.85M
Shares Outstanding (Diluted)359.75M

Key Highlights

  • 1Revenues increased 7.5% to $11.423 billion in Q1 2018 compared to Q1 2017.
  • 2Net income attributable to HCA Healthcare, Inc. surged by 73.5% to $1.144 billion ($3.18 per diluted share) in Q1 2018.
  • 3The company recorded a significant pre-tax gain of $405 million from the sale of facilities during the quarter.
  • 4Effective tax rate decreased significantly to 18.4% in Q1 2018 from 30.4% in Q1 2017, primarily due to the Tax Cuts and Jobs Act.
  • 5Consolidated admissions increased by 4.6% and revenue per equivalent admission rose by 2.9% year-over-year.
  • 6Cash flows from operating activities remained strong, increasing slightly to $1.300 billion in Q1 2018.
  • 7HCA repurchased $423 million of its common stock and declared a quarterly dividend of $0.35 per share.

Frequently Asked Questions

Revenue growth was primarily driven by a 4.6% increase in equivalent admissions and a 2.9% increase in revenue per equivalent admission, indicating both higher patient volumes and improved pricing/reimbursement. Same-facility revenues also saw a solid increase of 5.8%.

The Tax Cuts and Jobs Act significantly lowered the federal statutory corporate tax rate from 35% to 21%. This resulted in a substantial reduction in HCA's effective tax rate to 18.4% for the first quarter of 2018, compared to 30.4% in the prior year. This tax benefit contributed positively to net income.

HCA reported a significant pre-tax gain of $405 million from the sale of two hospital facilities in its Oklahoma market during the first quarter of 2018. This one-time gain significantly boosted the reported net income for the period and had a positive impact on earnings per share ($0.85 per diluted share).

HCA Healthcare expects its cash flows from operations, available credit facilities, and anticipated access to debt markets to be sufficient to meet its liquidity needs for the next 12 months. The company is also actively managing its debt through refinancing efforts and plans significant capital expenditures of approximately $3.5 billion for the full year 2018.