Universal Health Services Inc. (NYSE:UHS) delivered fourth-quarter 2018 adjusted earnings of $2.37 per share, beating the Zacks Consensus Estimate by 0.9%. Moreover, the bottom line improved 18.5% year over year and the upside is mainly attributable to rising revenues.
Net revenues increased 4.2% year over year to $2.8 billion and also surpassed the Zacks Consensus Estimate by 2.6%, backed by higher admissions and patient days.
Total operating expenses of $2.5 billion at the end of the four-quarter increased 8.2% year over year, mainly due to salaries, wages and benefits along with other operating expense.
Segment Update
Acute Care Hospitals:
Adjusted admissions and adjusted patient days inched up 2.2% and 4.8%, respectively, from the prior-year quarter. Net revenues (on a same facility basis) climbed 4.7% in the fourth quarter, majorly aided by rise in admissions and patient days.
Behavioral Hospitals:
On same facility basis, adjusted admissions rose 4.5% while adjusted patient days dipped 1.2%, both on a year-over-year basis. Net revenues were up 2% during the quarter under review on same facility basis owing to higher admissions.
Financial Update
As of Dec 31, 2018, the company had cash and cash equivalents of nearly $105.2 million, up 41.4% from year-end 2017.
Total assets were $11 billion as of Dec 31, 2018, up 4.7% from year-end 2017.
The company’s long-term debt came in at $ 3.9 billion, up 12.6% from year-end 2017.
For 2018, net cash provided by operating activities totaled $1.3 billion, up 13.6% year over year.
Buyback Program
During the fourth quarter, the company bought back 1.22 million shares worth $149.3 million.
Moreover, last December, its board of directors authorized a $500-million jump from the existing share repurchase program.
In 2018, the company bought back shares worth $401.3 million.
Full-Year Highlights
For 2018, net revenues grew 3.5% to $10.8 billion. Adjusted net income of the year summed $9.53 per share, up 26.6% year over year.
2019 Outlook
Net revenues for the year are projected between $11.2 billion and $11.4 billion. Adjusted EPS for the year is estimated at $9.70- $10.40. Capital expenditures are expected between $675 million and $725 million.
Zacks Rank
Universal Health currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Releases From the Medical Sector
Among other players from the medical sector having reported fourth-quarter earnings so far, the bottom-line results of Humana Inc. (NYSE:HUM) , Centene Corporation (NYSE:CNC) and Molina Healthcare, Inc (NYSE:MOH) outpaced the respective Zacks Consensus Estimate.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>
Centene Corporation (CNC): Free Stock Analysis Report
Molina Healthcare, Inc (MOH): Free Stock Analysis Report
Humana Inc. (HUM): Free Stock Analysis Report
Universal Health Services, Inc. (UHS): Free Stock Analysis Report
Original post
Zacks Investment Research