Dive Brief:
HCA Healthcare reported lower-than-expected profit in the third quarter and warned that financial troubles may extend into the remainder of the year, sending the for-profit health system’s stock price tumbling 12% from Friday to Tuesday.
The Nashville, Tennessee-based provider is recovering from back-to-back hurricanes that hit its Southeast portfolio this fall, resulting in a $50 million revenue loss in the third quarter. Additional hurricane losses could could reach $300 million next quarter, HCA CFO Mike Marks said on a Friday call with investors.
HCA maintained its full-year revenue guidance of between $69.8 billion and $71.8 billion. However, Marks said HCA now expects to be “on the lower half” of the range provided.
Dive Insight:
HCA is still reeling from Hurricanes Helene and Milton, which ripped into the Southeast within two weeks of each other earlier this fall, executives told investors on Friday morning. The health system had 29 hospitals affected by Helene and 34 hospitals impacted by Milton, according to Marks.
While most of the hospitals are now up and running, operations remain disrupted at Asheville, North Carolina-based Mission Hospital and HCA’s 455-bed teaching hospital in Largo, Florida.
Mission Hospital remains without potable water — a critical resource necessary to sanitize equipment and ensure safety standards. Asheville projects the hospital will be without water for “several more weeks,” Marks said.
To continue patient care in the interim, HCA has been bringing in tankers of water daily — a task that will run the health system $13 million through the month of October, according to Marks.
CEO Sam Hazen said he expects “significant expenses and lost revenue” related to Western North Carolina hurricane recovery for at least the remainder of 2024, with some “manageable” impacts continuing into 2025.
Largo Hospital flooded during Milton and is currently closed for repairs. Hazen expects the hospital will reopen in December, with the cost of repairs appearing on the health system’s fourth quarter results.
HCA executives said the growing threat of hurricanes will not deter the operator’s long-term expansion strategy. HCA has a heavy presence in America’s hurricane belt and has been previously impacted by large storms, including Hurricane Ian in 2022.
“We harden our facilities as much as we possibly can, but [hurricanes] are, in fact, a way of life,” Hazen said. He added that the most recent storms highlighted the unpredictable nature of extreme weather events. “I mean, Hurricane Helene was a Category 4 storm, and if you would have asked me what two communities were most impacted, I would have never said, in 100 years, Augusta, Georgia, and Asheville, North Carolina.”
Analysts from TD Cowen said in a note that HCA’s “underlying performance was solid” during the quarter despite investors’ “lofty expectations.”
Overall, HCA reported $1.3 billion in profit and $17.5 billion in revenue in the third quarter.
The operator mostly increased patient volumes during the quarter, with same-facilities inpatient admissions, emergency room visits and adjusted admissions all rising approximately 4.5% year over year. However, the system saw outpatient surgeries fall by 2% year over year.
