HCA-The Healthcare Co. satisfied but did not wow Wall Street with its second-quarter earnings released last week.
The nation's largest hospital chain, which changed its name during the recent quarter to help cleanse its image, could not escape the repercussions of its ongoing fraud investigation in its earnings figures.
Still, officials from the Nashville-based hospital company signaled their interest in more strategic hospital acquisitions overseas, building on their presence in both London and Switzerland.
HCA posted a $272 million net loss for the quarter ended June 30 after taking a $498 million, 89-cent-per-share charge related to its tentative partial settlement of its civil Medicare fraud case with the federal government (May 22, p. 2). But its per-share earnings figure still beat Wall Street estimates by 4 cents.
Excluding the settlement charge, a $6 million restructuring and investigation cost, and a $9 million gain on sales of facilities, HCA reported a profit of $223 million, or 40 cents per share, up from $182 million, or 31 cents per share, in the 1999 quarter.
Analysts polled by First Call/Thomson Financial had predicted 36 cents per share. HCA's total revenue dropped less than 1% to $4.1 billion, which company officials attributed to the company's divestiture of hospitals. It operates 204 facilities.
"Overall it was a pretty good quarter; revenues were a little better than expected and margins were good," said Peter Costa, healthcare analyst with ABN Amro in Boston. "It was pretty much what people were hoping to see."
The company's stock price dropped 12.5 cents per share to $31.81 on the earnings news.
Victor Campbell, HCA senior vice president, said the company has not yet cut the federal government a check for the $745 million stipulated in the tentative agreement struck in May. The understanding with the Justice Department is contingent on resolution of separate criminal Medicare fraud investigations pending against the company, among other issues.
Interest began accruing on the
$745 million amount when the tentative civil settlement was announced.
The civil settlement would resolve allegations that HCA billed too much for its home health and laboratory services and categorized illnesses to enhance its federal reimbursement.