Tuesday, July 22, 2003 | 11:15 a.m.
SUN STAFF AND WIRE REPORTS
Hospital giant HCA today reported a 31 percent drop in profits for the second quarter, citing a previously announced one-time charge for collecting less than expected from uninsured patients.
Also today, competitor Universal Health Services reported improved earnings and revenue.
Nashville-based HCA, the nation's largest for-profit hospital chain and a big operator in Las Vegas, earned $240 million, or 47 cents a share, in the three months ended June 30, compared with $350 million, or 66 cents a share, the same time a year earlier.
That includes an increase of $106 million -- or 13 cents per share -- in the company's allowance for so-called "doubtful accounts" of uninsured patients. The results also reflect a previously announced charge of $130 million for discontinuing development of a new patient accounting information system.
Analysts surveyed by Thomson First Call originally predicted earnings of 77 cents per share before HCA announced the two one-time charges, but later lowered that expectation to 75 cents per share.
Excluding those items, HCA's earnings matched analyst expectations.
Revenue for the quarter rose 11.5 percent to $5.5 billion from $4.9 billion a year earlier.
The company blamed the slow or declining hospital volume -- including a 3.6 percent reduction in outpatient surgical procedures -- on several factors, including "general economic softness, higher unemployment levels in several key markets, increased co-pays and deductibles, non-renewal of a managed care contract in Tennessee, and various competitive pressures in certain markets."
Despite that, HCA Chairman and CEO Jack Bovender said he remains confident in "our current assets and high-growth markets."
"You can't look at two quarters or a year as an overall long-term trend; we believe our strategy is very viable," he said.
Separately, another big Las Vegas hospital operator, Universal Health Services Inc. of King of Prussia, Pa., reported stronger financial results. Its profit of $51 million, or 82 cents per share, was up 19 percent on a per-share basis as revenue rose 12 percent to $903 million.
In Las Vegas, HCA owns two hospitals and is building a third. Universal has three hospitals and is building a fourth. It operates in Las Vegas as the Valley Health System.
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