10-QPeriod: Q3 FY2023

HCA Healthcare, Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed October 26, 2023For Securities:HCA

Summary

HCA Healthcare, Inc. (HCA) reported strong revenue growth in its third quarter of 2023, with total revenues reaching $16.213 billion, an increase of 8.3% year-over-year. This growth was driven by a combination of increased revenue per equivalent admission (up 3.6%) and higher equivalent admissions (up 4.5%). While revenue demonstrated robust performance, net income attributable to HCA Healthcare, Inc. saw a slight decrease to $1.079 billion ($3.91 per diluted share) from $1.134 billion ($3.91 per diluted share) in the prior year's quarter. This was partially influenced by a $105 million pre-tax loss related to a recently acquired hospital-based physician staffing joint venture. The company experienced an increase in patient volumes across key areas, with consolidated admissions up 2.8% and same-facility admissions up 3.4%. Emergency department visits and surgeries also saw modest increases. Despite the revenue growth, operating cash flow declined by $541 million to $2.479 billion, primarily due to unfavorable changes in working capital. Management anticipates continued inflationary pressures impacting operating expenses and maintains sufficient liquidity through operating cash flows, credit facilities, and access to debt markets.

Financial Highlights

46 data points
Beta

Revenue

$16.21B

Net Income

$1.08B

6.7% Net Margin

EPS (Diluted)

$3.91

Total Assets

$54.59B

Cash & Equivalents

$891.00M

Free Cash Flow

$1.33B

Financial Statements
Beta
Revenue$16.21B
Operating Expenses$14.58B
Interest Expense$483.00M
Net Income$1.08B
EPS (Basic)$3.98
EPS (Diluted)$3.91
Shares Outstanding (Basic)271.17M
Shares Outstanding (Diluted)275.42M

Key Highlights

  • 1Total revenues for Q3 2023 increased by 8.3% to $16.213 billion, compared to $14.971 billion in Q3 2022.
  • 2Net income attributable to HCA Healthcare, Inc. decreased slightly to $1.079 billion ($3.91 per diluted share) in Q3 2023, down from $1.134 billion ($3.91 per diluted share) in Q3 2022.
  • 3Consolidated admissions increased by 2.8% and same-facility admissions rose by 3.4% in Q3 2023.
  • 4A $105 million pre-tax loss from a new hospital-based physician staffing joint venture impacted Q3 2023 results.
  • 5Operating cash flow for Q3 2023 declined by $541 million to $2.479 billion, mainly due to changes in working capital.
  • 6HCA Healthcare repurchased approximately 4.17 million shares of common stock in Q3 2023 under its $3 billion repurchase program.
  • 7Salaries and benefits as a percentage of revenue increased slightly to 46.6% in Q3 2023 from 46.1% in Q3 2022, while supply costs as a percentage of revenue decreased to 14.9% from 15.5%.

Frequently Asked Questions

HCA Healthcare's revenue growth in Q3 2023 was primarily driven by a combination of an increase in revenue per equivalent admission (3.6%) and a rise in equivalent admissions (4.5%) on a consolidated basis. Same-facility metrics also showed similar positive trends.

Despite revenue growth, net income attributable to HCA Healthcare, Inc. saw a slight decrease. This was largely due to a $105 million loss before income taxes related to a hospital-based physician staffing joint venture where HCA acquired a controlling interest during the second quarter of 2023. Additionally, a decline in operating cash flow, primarily due to unfavorable working capital changes, may also be a contributing factor to overall financial performance sentiment.

HCA Healthcare reported that salaries and benefits as a percentage of revenue saw a slight increase, while supply costs as a percentage of revenue decreased. Other operating expenses, as a percentage of revenue, increased primarily due to higher costs for directed payment programs and insurance. Management acknowledges that inflation has negatively impacted certain expenses and expects these pressures to continue. They are managing these costs through operational efficiencies and monitoring labor market conditions, with a focus on controlling costs while maintaining clinical staffing levels.

HCA Healthcare is actively returning capital to shareholders. In Q3 2023, the company repurchased approximately 4.17 million shares of common stock under its $3 billion repurchase program, with $1.685 billion remaining authorization as of September 30, 2023. The Board of Directors also declared a quarterly dividend of $0.60 per share, payable in December 2023. Future dividends are subject to Board determination and debt agreement covenants.