HCA, Nashville, said it will trim capital spending and other costs in response to the slowing economy. The company also said that it will take advantage of a provision on $1.5 billion of its bonds to convert interest payments due in May 2009 into new bonds in order to provide the company greater liquidity in light of the volatile credit markets. The move will provide an additional $144 million in cash.
HCA emphasized that it has plenty of liquidityto the tune of $2 billion under its bank credit agreementsbut is just taking advantage of this provision as a precaution. I really want to emphasize to you that this is financial planning, and it is not based on our thinking that our business is going to go downhill significantly next year, because that is not the case, said Jack Bovender Jr., chairman and chief executive officer, during a conference call to discuss the companys third-quarter results.
Richard Bracken, HCAs president and chief operating officer, said HCA will constrain capital spending in both 2009 and 2010. The company will primarily do this by limiting the pace and scope of larger capital projects, said Bracken, who will replace Bovender as the companys CEO effective Jan. 1.
For the third quarter, HCA reported net income of $86 million, down sharply from 2007s third-quarter net income of $300 million. The year-ago quarter, however, included a $316 million gain on the sale of facilities, vs. a $50 million gain on facility sales in this years third quarter. Revenue was up 6.6% to $7 billion. For the nine months ended Sept. 30, HCA reported net income of $397 million on revenue of $21.11 billion. -- by Vince Galloro