HCA to push forward on capital initiatives, M&A in 2023

HCA Healthcare is making capital spending a precedence, at the same time as powerful financial situations are placing stress on its backside line. 

The Nashville, Tennessee-based for-profit system estimates $4.3 billion in capital spending in 2023, excluding acquisitions—a slight lower from the near $4.4 billion it spent in 2022.  Final 12 months’s spending got here in increased than anticipated because of actual property and data know-how investments, CFO Invoice Rutherford stated on Friday’s firm earnings name.

CEO Sam Hazen advised traders HCA will proceed to spend money on scientific tools and repair line enlargement, and proceed to pursue acquisitions within the outpatient house. It additionally plans to deploy capital for infrastructure initiatives, equivalent to campus expansions and freestanding emergency departments. 

HCA is just not as bullish on hospital amenities, with few acquisition alternatives there, Hazen stated. Final October, LCMC Well being agreed to purchase three of HCA’s Louisiana hospitals for $150 million. 

The system reported $2.65 billion in fourth-quarter internet earnings, a 32% year-over-year enhance. Working bills, excluding any relevant modifications to asset values, grew 3.2% to $12.33 billion, together with a 0.8% enhance in salaries and wages. Income rose 2.9% to $15.5 billion.

Fourth-quarter outcomes included $1.33 billion in positive factors from promoting amenities.

For the complete 12 months, internet earnings dropped 11.5% to $6.83 billion. Income grew 2.5% to $60.23 billion. Working bills elevated 4.3% to $48.21 billion. 

“As we push forward into 2023 and past, we imagine the sturdy demand for healthcare providers current alternative for HCA Healthcare in an in any other case difficult macro-environment. We imagine the corporate is well-positioned culturally, competitively and financially to capitalize,” Hazen stated on the decision. 

Excessive labor prices stay a prime situation for the healthcare business. Rutherford stated contract labor made up roughly 8% of HCA’s wage and wages expense within the fourth quarter. Nevertheless, these prices have been down about 16% year-over-year within the quarter. He expects contract labor prices to maintain trending downward all through this 12 months.

Hazen stated HCA is working to rent extra nurses as everlasting employees members, drawing in new graduates via tutorial partnerships and bringing on former journey nurses. 

The corporate introduced its board approved as much as $4.5 billion in share repurchases this 12 months, together with roughly $1.5 billion that had already been approved. Shares have been buying and selling at $248 every when markets opened on Friday, down from HCA’s present 52-week excessive at $275.16 per share.