UHS sees jump in net income, misses on revenue

For-profit hospital chain Universal Health Services saw a big jump in net income in the second quarter of 2018, but its revenue came in slightly short of analysts’ expectations.

The King of Prussia, Pa.-based hospital chain’s net income was $226.1 million in the second quarter of 2018, which ended June 30, up 22% from $185.4 million in the prior year. Revenues increased 2.6% to $2.68 billion during that time, compared with $2.61 billion in 2017.

Analysts with Zacks Investment Research expected UHS’ revenue to hit $2.7 billion in the quarter.

UHS also reported an $8 million unrealized gain from increased market value of shares of certain securities held for investment and up for sale.

The company’s earnings before interest, taxes, depreciation and amortization was $444.7 million during the quarter, compared with $438.3 million during the second quarter of 2017.

UHS added $9.5 million to its reserve for an the ongoing Department of Justice investigation into its behavioral health facilities, bumping the total reserve to about $43 million. Over the six-month period ending June 30, UHS placed $22.5 million in the reserve, working out to $17.1 million after taxes.

UHS cautioned that it doesn’t know what the ultimate resolution will be on that case, and the reserve amount could change.

Adjusted admissions at UHS’ acute care hospitals increased 1.9% during the second quarter, and net revenue per adjusted admission increased 3.1%. Overall acute care revenues increased 3.3%.

On the behavioral health side, adjusted admissions increased 1.2% on a same-facility basis, while adjusted patient days dropped 0.3%. Net revenue per adjusted admission increased 2%, and net revenue per adjusted patient day increased 3.6%. Overall behavioral health revenues increased 2.8%.

UHS operates 26 acute care hospitals and 301 behavioral health hospitals. The company also has 32 outpatient and other facilities in 37 states, plus Washington, D.C., the United Kingdom and Puerto Rico. The company has more than 83,000 employees.

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