HCA, Nashville, reported strong volume growth but said its first-quarter earnings were hit by a payment it made to its investors related to its initial public offering in March, according to a news release.
IPO hits HCA's first-quarter earnings
HCA reported net income of $240 million, down from $388 million in 2010's first quarter. Revenue was $8.06 billion, up 6.8% from the year-ago quarter. The company recorded a pre-tax charge of $181 million for a fee paid to its investors to end their management contract with HCA, according to the release. HCA made the third IPO in the company's history on March 15 and used the proceeds to pay down amounts owed on its revolving credit facilities. Its long-term debt, including the portion payable within one year, fell from $28.22 billion on Dec. 31, 2010, to $25.37 billion on March 31. The investors, including three private-equity firms and members of the Frist family, continue to hold a majority stake in HCA.
Comparing the quarters on a same-facility basis, admissions increased 1.6% and equivalent admissions increased 3.3%. Inpatient surgeries fell 2.3%, but outpatient surgeries increased 1%. It was the 14th straight quarter that HCA's equivalent admissions increased, Milton Johnson, president and chief financial officer of HCA, said during a conference call. Emergency visits increased 11.3%, and even excluding flu-related visits, they increased 9.3%, Johnson said. The company has averaged 4.5% annual growth in emergency visits over the past three years, Sam Hazen, president of operations, said during the call.
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