Why Universal Health Services, Inc. (NYSE: UHS) stock is under pressure

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Universal Health Services, Inc. Class B (NYSE: UHS) stock fell over 5% on 25th October, 2019 (As of 12:38 pm GMT-4 ; Source: Google finance) post weak third quarter of FY 19. The company has reported net income attributable to UHS of $97.2 million during the third quarter of 2019 as compared to $171.7 million during the comparable quarter of 2018.

UHS in the third quarter of FY 19 has reported the adjusted earnings per share of $1.99, missing the analysts’ estimates for the adjusted earnings per share of $2.26, as per Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 6.6 percent to $2.82 billion in the third quarter of FY 19

Moreover, during the third quarter of 2019, at the acute care hospitals, adjusted admissions (adjusted for outpatient activity) grew 7.4% and adjusted patient days rose 7%, as compared to the third quarter of 2018. At these facilities, net revenue per adjusted admission rose 1.6% while net revenue per adjusted patient day rose 2% during the third quarter of 2019 as compared to the third quarter of 2018. Net revenues from the acute care services on a same facility basis grew 9.3% during the third quarter of 2019 as compared to the third quarter of 2018.

Further, during the third quarter of 2019, at the behavioral health care facilities on a same facility basis, adjusted admissions rose 0.5% while adjusted patient days grew 0.4% as compared to the third quarter of 2018. At these facilities, the net revenue per adjusted admission has risen increased 2.0% while net revenue per adjusted patient day grew 2.2% during the third quarter of 2019 as compared to the comparable quarter in 2018. On a same facility basis, the behavioral health care services’ net revenues increased 2.1% during the third quarter of 2019 as compared to the third quarter of 2018.

Additionally, during the third quarter of 2019, the company had repurchased 550,564 shares at an aggregate cost of $79.5 million

For FY 19, the company expects the adjusted net income attributable to UHS for the year ended December 31, 2019 to $9.60 to $9.90 per diluted share as compared to the previously provided range of $9.70 to $10.40 per diluted share.

 

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