July 25, 2018 / 1:05 PM / 8 months ago

Hospital operator HCA raises forecast on higher patient admissions

(Reuters) - U.S. hospital operator HCA Healthcare Inc (HCA.N) raised its full-year earnings forecast as higher-than-expected patient admissions lifted second-quarter profit by 25 percent, sending its shares up 7 percent.

The upbeat results and forecast, coming from the largest for-profit U.S. hospital operator, lifted shares across a sector that has been pressured by weak patient volumes amid rising out-of-pocket medical costs.

HCA said same-facility equivalent admissions, which include patients who stay in the hospital overnight and those who are treated on an outpatient basis, rose 2.8 percent in the second quarter. This beat the consensus estimate of 1.5 percent, according to Evercore ISI.

While patient volumes increased in the previous quarter as well, thanks to a particularly strong flu season, many analysts said that was a one-time benefit.

“The fact that the trends are continuing without the flu benefit leads us to believe there is an underlying positive shift in demand,” Mizuho analyst Ann Hynes said.

HCA’s shares surged as much as 7.4 percent to $116.20. Tenet Healthcare (THC.N) rose 6 percent, while Community Health Systems (CYH.N) was up 2 percent.

Revenue per same-facility equivalent admissions, another key metric, rose 3.6 percent, HCA said, topping expectations of a 3.1 percent rise.

This could be due to increased advanced care required by patients admitted to HCA’s hospitals, Leerink analyst Ana Gupte wrote in a note.

Net income attributable to HCA rose 24.8 percent to $820 million, or $2.31 per share, above analysts’ estimates of 2.16 per share, according to Thomson Reuters I/B/E/S.

Revenue rose to $11.53 billion in the second quarter ended June 30, from $10.73 billion a year ago.

The company raised its profit forecast for the year to a range of $9.00 to $9.40 per share, from its prior forecast of $8.50 to $9.00 per share.

Reporting by Akanksha Rana and Manas Mishra in Bengaluru; Editing by Saumyadeb Chakrabarty

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