Profit outlook raised; company plans to sell 10 hospitals

Tuesday, March 29, 2005 | 11:06 a.m.

NASHVILLE, Tenn. -- HCA Inc., operator of three Las Vegas hospitals, said late Monday it expects higher earnings for the first quarter thanks in part to more patients who can pay their bills. The nation's largest for-profit hospital operator also disclosed plans to sell 10 hospitals in six states.

None of the for-sale properties is in Las Vegas.

Company shares surged nearly 8 percent, or $3.89, in late trading after the company raised its outlook. HCA stock fell 43 cents to close at $48.87 Monday on the New York Stock Exchange, before the news was released.

HCA now is predicting per-share net income of 88 cents to 93 cents for the quarter ending March 31, compared with 69 cents for the first quarter last year. Analysts surveyed by Thomson First Call had projected 76 cents per share.

Nashville-based HCA said its first-quarter earnings also were boosted by admitting fewer uninsured patients compared to the first quarter of 2004, and by cutting the number of its outstanding shares through a tender offer late last year.

The company does not expect to sell off the 10 hospitals until the end of this year, but the hospitals had a combined net revenue of $654 million. Four of the hospitals are in West Virginia: St. Joseph's in Parkersburg; Saint Francis in Charleston; Raleigh General in Beckley and Putnam General in Hurricane.

Chairman Jack O. Bovender Jr. said the sale will allow HCA to focus on its hospitals in urban markets.

"Many of the facilities to be divested have been a part of HCA for several years and, although it was a difficult decision, we believe the divestitures are in the best long-term interests of the company, the affected hospitals and their local communities," he said.

The other hospitals are: Clinch Valley Medical Center in Richlands, Va.; Grandview Medical Center in Jasper and River Park in McMinnville, Tenn.; North Monroe Medical Center in Monroe, La.; Southwestern Medical Center in Lawton, Okla.; and Capital Medical Center in Olympia, Wash.