HCA Healthcare lifts annual forecasts on strength in Medicare business

Audio By Carbonatix

Enlarge

By Christy Santhosh and Siddhi Mahatole

(Reuters) -HCA Healthcare raised its yearly profit and revenue forecasts on Friday on sustained demand for surgical procedures as well as strength in its Medicare business, sending its shares up 4% to $460.12.

Hospital operators are benefiting from higher utilization underpinned by steady demand for surgical procedures, particularly among older adults, who are covered under the government’s Medicare insurance plans.

However, HCA flagged uncertainty surrounding individual Affordable Care Act plans, also known as Obamacare, which come with COVID-19-era subsidies that are due to lapse in 2026.

The company said it was actively advocating for the extension of these tax credits as the expiry could reduce coverage, raise premiums and lower enrollment, leaving hospitals such as HCA with higher uncompensated care costs.

“We’re not ready to give you our financial plan for 2026 yet”, CEO Sam Hazen said, adding that the company needed to see how some federal policies would land before defining capital allocation for next year.

HCA said it performed particularly well in the third quarter this year when compared to previous years, considering the dynamics with vacations and physician movements during the summer months.

It said volumes in Medicaid, for lower-income persons, remained low, but were offset by strength in its Medicare business.

The company expects 2025 adjusted profit per share to be between $27 and $28, compared with its previous forecast of $25.50 to $27 per share.

HCA now expects annual revenue in the range of $75 billion to $76.5 billion, compared to $74 billion to $76 billion it had forecast earlier.

It earned adjusted profit of $6.96 per share for the third quarter, compared with analysts’ estimate of $5.72 per share, according to data compiled by LSEG.

(Reporting by Siddhi Mahatole and Christy Santhosh in Bengaluru; Editing by Pooja Desai)