King of Prussia, Pennsylvania-based Universal Health Services revised its earnings guidance down for the year after falling short of expectations in its third quarter.
The health system giant posted earnings of $97.2 million for the quarter ending Sept. 30, down 43% from $171.7 million during the same period last year. Meanwhile, revenues were $2.8 billion during the third quarter of 2019, up 6.6% compared to $2.7 billion during the third quarter of 2018.
UHS officials said they revised their estimated range on their earnings for the year to $9.60 to $9.90 per diluted share compared to a previously provided range of $9.70 to $10.40 per diluted share.
They credited the drop, in part, to an unrealized loss of $0.11 per diluted share, or $12.5 million pretax, that was recorded during the first nine months of the year from a decrease in the market value of shares of certain marketable securities held for investment.
They said it is not due to the unfavorable after-tax impact of the $14.6 million in changes in the reserve the company has been building in connection with a Department of Justice investigation into certain behavioral health care facilities or the unfavorable after-tax impact of $74.6 million resulting from a $97.6 million provision for asset impairment.
In July, UHS reached a $127 million settlement with the DOJ more than three years after it disclosed it was under investigation for billing practices at its behavioral health facilities. The health system had been steadily putting aside money in reserves for the expected settlement and said that, as of September 30, it had stowed $134 million away.