HCA Healthcare (HCA) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues rose 7.9% year-over-year to $17.487 billion, with net income up 17.7% to $1.270 billion ($4.88 per diluted share), despite significant operational and financial impacts from two major hurricanes affecting several facilities.

• Adjusted diluted EPS increased 25% to $4.90, including a $0.15 per share negative impact from hurricane-related lost revenue and expenses.

• Inpatient admissions and adjusted admissions both grew 4.5% year-over-year; emergency room visits increased 4.6%.

• Outpatient surgery volumes declined 2%, but revenue in this category increased 5% due to higher acuity and improved payer mix.

• Q3 results included $4 million in losses on sales of facilities and $50 million in hurricane-related expenses and lost revenues.

Financial highlights

• Q3 2024 revenue: $17.487 billion (up from $16.213 billion in Q3 2023); net income attributable to HCA: $1.270 billion (up from $1.079 billion).

• Adjusted EBITDA for Q3 2024 was $3.267 billion, up from $2.880 billion in Q3 2023; margin improved to 18.7%.

• Labor cost as a percent of revenue improved by 160 basis points; contract labor costs fell 18% year-over-year.

• Supply and other operating costs as a percent of revenue increased slightly year-over-year.

• Medicaid supplemental payment programs provided a modest benefit, with a projected $100-$200 million tailwind for 2024.

Outlook and guidance

• 2024 guidance reaffirmed, but results are expected at the lower half of ranges due to hurricane impacts; estimated ongoing hurricane-related expenses and lost revenues in Q4 2024 of $200–$300 million ($0.60–$0.90 per share), excluding insurance recoveries.

• Volume growth for 2025 is expected to remain elevated at 3%-4%.

• Earnings growth for 2025 is projected to be near or above the upper end of long-term target ranges for both diluted EPS and Adjusted EBITDA.

• Cash net revenue per adjusted admission is expected to grow 2%-3% in 2025.

• Planned capital expenditures for 2024 are expected to approximate $5 billion.