HCA Holdings, Inc.
) announced its preliminary financial results for the third
quarter of 2012. The company expects to record operating income
of $355 million or 77 cents per share, representing a substantial
increase from $318 million or 60 cents per share recorded in the
year-ago quarter. However, the operating income per share
projection lags the Zacks Consensus Estimate of 78 cents.
Operating income excludes non-recurring items, such as gains
on sale of facilities of $5 million or 1 cent per share in the
third quarter of 2012 and $1 million in the year-ago quarter,
along with post-tax losses on retirement of debt amounting to
$256 million ($406 million pre-tax) or 49 cents per share in the
prior-year quarter. Including these items, net income is
projected to be $360 million or 78 cents per share, showing a
steep upsurge from $61 million or 11 cents per share in the third
quarter of 2011.
HCA expects revenues of $8.062 billion in the third quarter of
2012, up 11% from $7.258 billion in the year-ago quarter.
However, revenues are significantly lower than the Zacks
Consensus Estimate of $8.932 billion.
HCA's adjusted earnings before interest, taxes, depreciation
and amortization (EBITDA) projection stands at $1.533 billion, up
from $1.412 billion in the prior-year quarter. Depreciation and
amortization is expected to be $417 million, while interest
expense should be around $446 million. Provision for taxes is
anticipated to be about $220 million. Additionally, net income
attributable to non-controlling interests will likely be $95
Meanwhile, same facility admissions increased 2.1% year over
year in the third quarter of 2012 and same facility equivalent
admissions inched up 2.6%. Further, debt-to-adjusted EBITDA was
about 4.1x at the end of the third quarter, compared to 4.5x at
the end of 2011.
HCA also revealed its plan of declaring a special cash
dividend of $2.50 per share in the last quarter of 2012. The
dividend will be paid out of funds borrowed under the company's
revolving credit facilities or from other loans. However, the
payment is subject to legal and contractual restrictions and is
not yet final.
After making adjustments for the special dividend and
borrowings required for it, the debt-to-adjusted EBITDA figure
for September 30, 2012 stands at 4.3x. However, these preliminary
results are open to change as the finalization of HCA's quarterly
financial and accounting procedures are not yet over. The final
results are expected to be revealed on November 1, 2012.
HCA, which competes with
Tenet Healthcare Corp.
), carries a Zacks #3 Rank (short-term Hold). We maintain a
long-term 'Neutral' recommendation on the shares.
HCA HOLDINGS (HCA): Free Stock Analysis
TENET HEALTH (THC): Free Stock Analysis
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