HCA Stock Increases Over 6% Pre-Market: Why It Happened

By Amit Chowdhry ● July 20, 2021
  • The stock price of HCA Healthcare Inc (NYSE: HCA) increased by over 6% pre-market. This is why it happened.

The stock price of HCA Healthcare Inc (NYSE: HCA) increased by over 6% pre-market. Investors are responding positively to HCA Healthcare’s financial and operating results for the second quarter ended June 30, 2021.

The key second-quarter metrics (all percentage changes compare Q2 2021 to Q2 2020 unless otherwise noted):

— Revenues totaled $14.435 billion

— Net income attributable to HCA Healthcare, Inc. totaled $1.450 billion, or $4.36 per diluted share

— Adjusted EBITDA totaled $3.219 billion

— Cash flows from operating activities totaled $2.251 billion

— Same facility admissions increased 17.5% and same facility equivalent admissions increased 26.8%

The revenues in the second quarter of 2021 increased to $14.435 billion, compared to $11.068 billion in the second quarter of 2020. The net income attributable to HCA Healthcare totaled $1.450 billion, or $4.36 per diluted share, compared to $1.079 billion, or $3.16 per diluted share, in the second quarter of 2020. 

The second quarter of 2021 results include gains on sales of facilities of $8 million, or $0.02 per diluted share, and losses on retirement of debt of $12 million, or $0.03 per diluted share. And the second quarter of 2020 results included losses on sales of facilities of $27 million, or $0.07 per diluted share. The company recognized $822 million ($590 million net of tax), or $1.73 per diluted share, in government stimulus income during the second quarter of 2020 related to general distribution funds received from the provider relief fund established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. 

In October 2020, the company announced it would return, or repay early, its share of provider relief fund distributions of approximately $1.6 billion and approximately $4.4 billion in Medicare accelerated payments. And in the third quarter of 2020, the company reversed the $822 million of government stimulus income that it recognized during the second quarter of 2020.

For the second quarter of 2021, the Adjusted EBITDA totaled $3.219 billion, compared to $2.666 billion in the second quarter of 2020, which included $822 million in government stimulus income. And adjusted EBITDA is a non-GAAP financial measure. 

Same facility admissions increased 17.5% and same facility equivalent admissions increased 26.8% in the second quarter of 2021, compared to the prior year period. And same facility emergency room visits increased 40.5% in the second quarter of 2021, compared to the prior year period. And the same facility inpatient surgeries increased 15% while same facility outpatient surgeries increased 52.5% in the second quarter of 2021 compared to the same period of 2020. The second quarter of 2021 volume statistics show strong recoveries from the pandemic-related restrictions and policies that negatively affected patient volumes during the second quarter of 2020. And the same facility revenue per equivalent admission increased 2.6% in the second quarter of 2021, compared to the second quarter of 2020.

Due to the decline in volumes in the second quarter of 2020 driven by the pandemic-related restrictions and policies, the company believes a comparison of volume statistics to the comparable period in 2019 provides additional context to the improvement in operations during 2021. 

KEY QUOTE:

“With the effects of the pandemic moderating in the second quarter, we experienced a strong rebound in demand for healthcare services. We continue to invest aggressively in our strategic agenda, which is building greater clinical capabilities to serve our communities while also developing more comprehensive enterprise resources to support caregivers and differentiate our local networks.”

— Sam Hazen, Chief Executive Officer of HCA Healthcare

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.