HCA Healthcare landed on the upside of Wall Street’s fourth-quarter revenue estimates but missed on earnings amid hundreds of millions in costs and lost revenues stemming from September’s extreme weather events.
In results reported Friday morning, the country’s largest for-profit hospital operator outlined $18.29 billion in fourth-quarter total revenues, up 5.7% year over year. Net income attributable to the company was $1.44 billion ($5.63 per diluted share), a 10.5% year-over-year dip that flipped to a 5.4% increase after adjustments.
The quarter’s performance include a $195 million loss ($0.59 per share) on facility sales, largely tied to Regional Medical Center in California, as well as a $200 million hit ($0.60 per share) tied to Hurricane Helene and Hurricane Milton’s impact and damages to facilities in Florida, North Carolina and Georgia.
The storms had an adverse impact on HCA’s volumes to the tune of 20 to 40 basis points, Chief Financial Officer Mike Marks told investors. Supply and repair costs, in particular for the company’s Largo Hospital in Tampa, also contributed to additional operating expenses, executives said. All affected facilities have now resumed normal operations.
Still, CEO Sam Hazen said he was pleased with the “strong business fundamentals” underlying the fourth quarter’s top-line numbers.
Demand for healthcare services has remained strong through the quarter despite the storms and “a depressed respiratory season,” with same-facility admissions rising 3%, same-facility equivalent admissions up 3.1% and same-facility ER visits rising 2.4%, he shared. Same-facility inpatient surgeries increased 2.8%—as rehab, obstetrics and cardiac procedure volumes “continue to be strong”—while same-facility outpatient surgeries dipped 1.3%.
Revenue metrics also maintained a strong course, the CEO said, with same-facility net revenue per equivalent admission rising 2.9% over the prior year “in line with our expectations [and] consistent with our trends all year.” HCA’s payer mix also held steady, with the fourth quarter’s same-facility managed care admissions rising 9.2% year over year.
A similar story played out for HCA’s full-year numbers, which came in below projections from earlier in the year that did not anticipate the storms. Total revenue was $70.6 billion, up 8.7% year over year, while net income attributable to the company was $5.76 billion ($22 per diluted share), up 9.9% over 2023.
“When we consider the $250 million unfavorable hurricane impact, the prior year $145 million payer settlement and the incremental net Medicaid supplemental program benefit in the year, we are very pleased with the core operating performance of the company in 2024,” Marks said.
Looking ahead, the company issued 2025 guidance placing revenues between $72.8 billion and $75.8 billion, net income attributable to HCA of $5.85 billion to $6.29 billion and adjusted EBITDA of $14.3 billion to $15.1 billion.
Those ranges are in line with a preliminary outlook executives provided during the preceding earnings call and assume a growth in equivalent admissions between 3% and 4%, Marks said. The company is also expecting offsetting adjustments in the hurricane-hit markets—an earnings bump from reopening Florida’s Largo Hospital and a decline as communities recover within the North Carolina division.
As of midday Friday, HCA’s shares were trading nearly 4% below open.
HCA’s board has authorized additional share repurchases of up to $10 billion as well as a $0.72 per share quarterly dividend. The company’s balance sheet reflected $1.93 billion cash and cash equivalents and total assets of $59.51 billion as of Dec. 31.
Investors seek clues on Trump policies' health system impact
A Q&A session held during HCA’s Friday morning earnings call leaned more heavily into health policy prognostication as investors look for answers on Trump administration uncertainties. Their questions addressed long-standing policy issues such as the fate of enhanced subsidies or site-neutral payment legislation as well early activity on immigration and international trade that is dominating the week’s news cycles.
On potential tariffs, Hazen said HCA’s group purchasing organization has been working on mitigation strategies “for many years, including actions like fixed-price contracting, supply chain mapping and risk assessments and a lot of work on sourcing.” Going into 2025, the company has “about 70%” of its supplies contracted with firm pricing, he said.
“Like you, we are closely monitoring the announcements on tariffs from the new administration, including which countries are targeted, the rates of tariffs being implemented and potential tariff exclusions for healthcare-related items,” Hazen told investors during the call. “… We need more specific information on the details of these tariff policies, and we’re going to need that before we can produce additional estimates of impact.”
On immigration, Hazen noted that the company doesn’t hire undocumented workers, so “the impact would be more on supply and demand for labor in those skill mixes. And we’re tracking it like you are, but no special insider note that we can give you at this point.”
Hazen also reiterated to investors that the hospital chain is against programs that cut Medicare outpatient hospital reimbursement, but acknowledged that policies paying 24/7, fully equipped hospitals the same rate as less costly outpatient sites “does not seem to make a lot of sense to us.” He said the company has not yet seen a bill go forward with enough information for the company to give investors any estimates, and noted that certain floated proposals focusing on specific services would have no material impact on HCA if implemented.
Additionally, Marks said the implementation of any site-neutral policies wouldn’t force HCA to adjust its current strategy to flesh out its outpatient networks.
“We believe we are finding opportunities to extend the reach of our networks into new communities. Again, [to] make it more convenient and more efficient for the patient, and then fully integrate that particular facility into the larger hospital-centric health system is part-and-parcel to our network development strategy—so I don't see any changes to that as a result of a Medicare site-neutral provision, if one were to be implemented.”
On the fate of enhanced Medicaid subsidies, Hazen said it’s still too early to see whether the Trump administration will support an extension past the end of 2025. Still, the company is “active in the process” of working with others to lobby for such an extension and sees exchange enrollment growth and other outcomes as strong points in its favor.
“We believe it’s a positive outcome for families, it creates greater access to care, it improves outcomes—so all that is a backdrop we think, politically, is a positive and presents an opportunity for the Trump administration,” Hazen said. “We think the backdrop [of] growth, the backdrop of satisfaction within the enrollment is a positive and we see opportunities to work with the Trump administration to find a pathway forward to continue what’s been a very positive community benefit.”