Profit jumps 47 percent for Vegas hospital operator

Karin Miller

Thursday, Oct. 25, 2001 | 10:30 a.m.

NASHVILLE, Tenn. -- HCA, the nation's largest for-profit hospital chain, announced Wednesday that third-quarter profits increased 47 percent on the strength of patient volume and gains from the sale of HCA properties.

For the three months ended Sept. 30, the Nashville-based company earned $256 million, or 48 cents per share, compared to $174 million, or 31 cents a share, during the third quarter of 2000.

Excluding one-time items, HCA earned $209 million, or 40 cents per share, meeting the expectation of analysts surveyed by Thomson Financial/First Call.

Even so, shares of HCA stock fell $2.36 to close at $38.74 on the New York Stock Exchange.

Later in the day HCA announced a plan to repurchase up to $250 million worth of stock.

HCA is a big operator in the Las Vegas market with its Sunrise and MountainView hospitals.

Financial analyst Sheryl Skolnick, often a critic of the company's practices, said the stock drop seemed unfair because HCA was "doing an admirable job. ... It just shows how nervous and twitchy the market is."

Frank Morgan, an analyst with Jeffries & Co. Inc., said the company's results were solid, but investors looking to move from defensive sectors like health care into higher growth prospects like technology stocks may have been looking for any excuse "to punt" HCA. He said there's also a perception that HCA's "ability to sustain the growth is questionable."

The company has seen earnings per share grow at least 20 percent in eight of the last nine quarters.

During the third quarter revenues increased to $4.44 billion, up 8 percent from $4.09 billion in the third quarter of 2000.

Same-facility revenues, which include hospitals owned at least a year and provide a key barometer for the chain's fiscal health, increased nearly 11 percent compared with the prior year's quarter.