Hospital operator HCA raises 2023 profit view as surgery volumes rebound

Reuters | July 27, 2023

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(Reuters) -Hospital operator HCA Healthcare Inc on Thursday raised its annual profit forecast, betting on a recovery in non-urgent medical procedures as more patients return to hospitals for surgeries delayed during the COVID-19 pandemic.

The volumes of medical procedures are trending upwards after the U.S. government ended the public health emergency status for COVID-19 in May.

The demand recovery has also boosted margins for others including medical device makers such as Johnson & Johnson and Abbott Laboratories, which topped second-quarter profit estimates last week.

HCA raised its full year profit forecast in the range of $17.70 to $18.90 per share, up from $17.25 to $18.55 previously.

Some insurers have, however, indicated that the recovery in medical procedures was not as per expectation, and the jump was mostly limited to hip and knee replacements among older adults.

UnitedHealth Group had warned earlier this year that a resumption in long-delayed surgical procedures would hit profit growth, but reported a smaller-than-expected jump in medical costs that allayed fears of rising costs.

Heightened expectations of a spike in surgical procedures ahead of the earnings could drive HCA stock lower on Thursday, said Citi analyst Jason Cassorla.

Shares of HCA fell 3.4% to $272.3 in premarket trading even as the company’s second-quarter revenue of $15.86 billion beat Refinitiv estimates of $15.62 billion. The shares have risen 17% this year compared to a marginal decline in S&P 500 healthcare index.

(Reporting by Khushi Mandowara and Vaibhav Sadhamta in Bengaluru; Editing by Shinjini Ganguli)