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

HCA Healthcare is making capital spending a precedence, whilst robust financial circumstances 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 yr’s spending got here in greater than anticipated attributable to actual property and data know-how investments, CFO Invoice Rutherford stated on Friday’s firm earnings name.

CEO Sam Hazen informed buyers HCA will proceed to put money into medical gear and repair line growth, and proceed to pursue acquisitions within the outpatient area. It additionally plans to deploy capital for infrastructure initiatives, corresponding to campus expansions and freestanding emergency departments. 

HCA isn’t 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 web revenue, 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 beneficial properties from promoting amenities.

For the total yr, web revenue 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 consider the sturdy demand for healthcare companies current alternative for HCA Healthcare in an in any other case difficult macro-environment. We consider the corporate is well-positioned culturally, competitively and financially to capitalize,” Hazen stated on the decision. 

Excessive labor prices stay a high concern 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 had been down about 16% year-over-year within the quarter. He expects contract labor prices to maintain trending downward all through this yr.

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

The corporate introduced its board approved as much as $4.5 billion in share repurchases this yr, together with roughly $1.5 billion that had already been approved. Shares had 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.