HCA Healthcare, Inc. Quarterly Report for Q1 Ended Mar 31, 2019

Summary

HCA Healthcare, Inc. (HCA) reported a solid first quarter for 2019, demonstrating revenue growth despite a year-over-year decrease in net income attributable to HCA Healthcare, Inc. Revenues increased by 9.6% to $12.517 billion, driven by an increase in both revenue per equivalent admission and equivalent admissions. However, net income attributable to HCA Healthcare, Inc. decreased to $1.039 billion ($2.97 per diluted share) from $1.144 billion ($3.18 per diluted share) in the prior year's first quarter. This decline was largely due to the absence of significant gains on sales of facilities that boosted the prior year's results, and a notable increase in cash used for investing activities, primarily driven by a significant acquisition. The company highlighted strong operational performance with increases in consolidated and same-facility admissions and surgeries. Investments in capital expenditures, including a substantial acquisition of a seven-hospital system in North Carolina, underscore HCA's commitment to growth and expanding its market presence. While cash flow from operations saw a decline, primarily due to working capital changes including a company 401(k) match payment, HCA maintains a strong liquidity position supported by available credit facilities and access to debt markets. The company continues to manage its significant debt load and focus on operational efficiencies.

Key Highlights

• 1HCA Healthcare reported a 9.6% increase in consolidated revenues to $12.517 billion for Q1 2019 compared to Q1 2018.
• 2Net income attributable to HCA Healthcare, Inc. decreased by 9.2% to $1.039 billion ($2.97 per diluted share) in Q1 2019, compared to $1.144 billion ($3.18 per diluted share) in Q1 2018, primarily due to the absence of significant gains on facility sales from the prior year.
• 3Consolidated equivalent admissions increased by 4.8% and revenue per equivalent admission increased by 4.6% in Q1 2019, indicating strong patient volume and pricing power.
• 4Cash provided by operating activities decreased by $309 million to $974 million in Q1 2019, mainly due to negative changes in working capital, including a significant payment for the 2018 401(k) company match.
• 5Investing activities saw a substantial increase, with acquisitions rising to $1.474 billion in Q1 2019, largely due to the acquisition of a seven-hospital system in North Carolina.
• 6Capital expenditures, excluding acquisitions, were $781 million in Q1 2019, with approximately $3.7 billion expected for the full year 2019, reflecting continued investment in facilities.
• 7HCA repurchased $278 million of its common stock in Q1 2019, signaling a commitment to returning capital to shareholders.

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