HCA Shares Tumble 15% on Disappointing Guidance, Analysts Negatively Surprised
2022.04.22 17:51
HCA (HCA) Shares Tumble 15% on Disappointing Guidance, Analysts Negatively Surprised
Shares of HCA Healthcare (NYSE:HCA) are down nearly 15% today after the company trimmed its FY EPS and revenue outlook.
The healthcare provider reported a Q1 adjusted EPS of $4.14, in line with the year-ago period. EPS stood at $4.14, compared to $4.14 in the year-ago quarter and below analyst expectations of $4.25 per share.
HCA reported first-quarter revenue of $14.95 billion, up 6.9% YoY and topping the consensus estimates of $14.76 billion.
For FY, the company now expects EPS in the range of $16.40 to $17.60, down from the prior outlook of $18.40 to $19.20, and below the consensus estimates of $18.82 per share.
Revenue is expected to range between $59.50 billion and $61.50 billion, down from the previous guidance of $60.00 billion to $62.00 billion, and compared to analyst consensus of $61.16 billion.
HCA expects FY adjusted EBITDA in the range of $11.8 billion to $12.4 billion, compared to the previous outlook of 12.55 billion to $13.05 billion, and below the expected $12.82 billion.
The healthcare company announced quarterly dividends of $0.56 per share, to be paid on June 30.
BMO analyst Matt Borsch commented:
“We expect investors will be surprised by this earnings miss (if modest) even though the apparent causal factor (wage inflation) was known to be in play. In the HCA press release, management pointed to “positive volume/revenue indicators” that were more than offset by ‘inflationary pressures on labor costs’,” he said in a note.
Cowen analyst Gary Taylor was also surprised by a guidance cut of this magnitude.
“While we previewed a 1Q22 EBITDA miss, we did not anticipate the company would lower 2022 EBITDA guidance by 5-7% (depending on your treatment of 2021 TX MDCD funds). Ex-TX MDCD, HCA slightly beat our SS revenue estimate but missed our labor cost estimate by 110bp. We expect the historically-rich 9.5x forward EBITDA multiple to reset by 0.5-1.0x until greater 2023 visibility is developed,” Taylor commented.
By Senad Karaahmetovic
