10-QPeriod: Q3 FY2021

HCA Healthcare, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 1, 2021For Securities:HCA

Summary

HCA Healthcare, Inc. (HCA) reported strong revenue growth for the third quarter of 2021, with a 14.8% increase to $15.276 billion compared to the prior year. This growth was driven by a combination of increased revenue per equivalent admission and a higher volume of equivalent admissions. Net income attributable to HCA Healthcare, Inc. saw a significant jump to $2.269 billion, or $7.00 per diluted share, a substantial increase from $668 million, or $1.95 per diluted share, in the third quarter of 2020. This surge in profitability was notably influenced by a $1.047 billion gain on sales of facilities in the current quarter, compared to a much smaller gain in the prior year. It is important to note that the prior year's third quarter results included a substantial $822 million reversal of government stimulus income. Excluding these one-time items, the underlying operational performance shows solid year-over-year improvement. The company experienced a rebound in patient volumes, with consolidated admissions up 5.9% and same-facility admissions up 6.8%. Emergency department visits showed particularly strong growth, increasing by 28.9% on a consolidated basis. However, inpatient surgery volumes were constrained, likely due to capacity being utilized to treat a surge in COVID-19 patients. The company continues to manage rising labor costs, with salaries and benefits as a percentage of revenue increasing slightly, and supply costs, particularly for pharmacy, also saw an increase driven by COVID-19 therapies and PPE utilization. Despite these cost pressures, HCA Healthcare demonstrated robust financial performance, supported by strategic facility sales and a general recovery in patient demand.

Financial Highlights

48 data points
Beta

Revenue

$15.28B

Net Income

$2.27B

14.9% Net Margin

EPS (Diluted)

$7.00

Total Assets

$49.56B

Cash & Equivalents

$1.03B

Free Cash Flow

$1.39B

Financial Statements
Beta
Revenue$15.28B
Operating Expenses$12.12B
Interest Expense$398.00M
Net Income$2.27B
EPS (Basic)$7.13
EPS (Diluted)$7.00
Shares Outstanding (Basic)318.07M
Shares Outstanding (Diluted)324.03M

Key Highlights

  • 1Revenue increased by 14.8% to $15.276 billion in Q3 2021 compared to Q3 2020.
  • 2Net income attributable to HCA Healthcare, Inc. surged to $2.269 billion ($7.00/share) in Q3 2021, up from $668 million ($1.95/share) in Q3 2020.
  • 3Significant gain on sales of facilities ($1.047 billion) contributed substantially to Q3 2021 net income.
  • 4Consolidated admissions increased by 5.9% and same-facility admissions by 6.8% in Q3 2021, indicating a recovery in patient volumes.
  • 5Emergency department visits saw a substantial increase of 28.9% (consolidated) and 31.2% (same facility).
  • 6Salaries and benefits costs increased as a percentage of revenue to 46.4% in Q3 2021 from 45.8% in Q3 2020, with per equivalent admission costs rising 7.4%.
  • 7Supply costs per equivalent admission increased by 6.8%, with pharmacy supplies up 24.0% due to COVID-19 therapies.

Frequently Asked Questions

The substantial increase in net income was driven by a combination of strong revenue growth, a rebound in patient volumes, and a significant gain of $1.047 billion from the sale of facilities. While operational performance improved, the gain on asset sales was a major contributor to the reported net income figure.

The pandemic continues to influence operations. While patient volumes have rebounded overall, a surge in COVID-19 admissions in Q3 2021 constrained inpatient surgery capacity. The company also experienced increased costs for pharmacy supplies (due to COVID-19 therapies) and general medical/surgical supplies (PPE).

During the first nine months of 2021, HCA Healthcare repurchased 29.343 million shares of its common stock. The company has an ongoing stock repurchase program with approximately $2.658 billion remaining authorization as of September 30, 2021. A quarterly dividend of $0.48 per share was declared, payable in December 2021, subject to the terms of debt agreements.

The primary cost pressures identified are labor costs and supply costs. Salaries and benefits as a percentage of revenue increased, with labor rates rising due to increased utilization of contract, overtime, and premium rate labor. Supply costs, especially for pharmacy and PPE, also increased, driven by demand related to COVID-19.