KING OF PRUSSIA, PA — Universal Health Services, Inc. (NYSE: UHS) reported a strong financial performance in the second quarter of 2024, with net income attributable to UHS reaching $289.2 million, or $4.26 per diluted share. This compares favorably to $171.3 million, or $2.42 per diluted share, in the same period last year. Net revenues grew by 10.1% to $3.908 billion, up from $3.548 billion in the second quarter of 2023.
Adjusted net income for the quarter was $292.6 million, or $4.31 per diluted share, compared to $179.4 million, or $2.53 per diluted share, in the prior year.
Key Financial Drivers
The increase in net income was driven by net incremental reimbursements totaling approximately $34.5 million, or $0.38 per diluted share. This included $18.8 million from a state-directed payment program in Washington and $15.7 million from additional Medicaid reimbursements in Idaho.
Universal Health Services also recorded an unrealized after-tax loss of $5.9 million, or $0.09 per diluted share, due to a drop in the market value of certain equity securities. However, this was partially offset by a favorable after-tax impact of $2.5 million, or $0.04 per diluted share, from tax benefits related to employee share-based payments.
Operational Highlights
EBITDA (earnings before interest, taxes, depreciation, and amortization) net of noncontrolling interests was $573.2 million, or 14.7% of net revenues, up from $419.3 million, or 11.8%, in the second quarter of 2023. Adjusted EBITDA, excluding the impact of other income and expenses, was $578.7 million, or 14.8% of net revenues, compared to $425.9 million, or 12.0%, in the prior year.
For the first six months of 2024, net income attributable to UHS was $551.0 million, or $8.08 per diluted share, compared to $334.4 million, or $4.70 per diluted share, in the same period in 2023. Net revenues for this period increased by 10.5% to $7.751 billion, up from $7.016 billion last year.
Segment Performance
The company’s acute care hospitals saw a 3.4% increase in adjusted admissions and a 1.6% rise in adjusted patient days during the second quarter. Net revenue per adjusted admission increased by 3.5%, and net revenue per adjusted patient day grew by 5.3%. On a same-facility basis, acute care services’ net revenues increased by 6.6% year-over-year.
Behavioral health care facilities experienced a slight decrease in adjusted admissions by 0.4% but a 1.4% increase in adjusted patient days. Net revenue per adjusted admission surged by 11.2%, and net revenue per adjusted patient day rose by 9.3%. Consequently, net revenues for behavioral health care services increased by 11.0% on a same-facility basis.
Cash Flow and Liquidity
Net cash provided by operating activities was $1.076 billion for the first half of 2024, compared to $654 million in the same period last year. The increase was driven by positive changes in net income, accounts receivable, and accrued taxes.
As of June 30, 2024, UHS had $1.02 billion in available borrowing capacity under its $1.2 billion revolving credit facility.
Stock Repurchase and Revised Forecasts
On July 24, 2024, the Board authorized a $1.0 billion increase in the stock repurchase program, bringing the total available authorization to $1.228 billion. During the second quarter, UHS repurchased 373,000 shares at a cost of approximately $70.0 million.
Based on strong performance in the first half of the year, UHS has revised its 2024 financial forecasts. The company now expects net revenues to range between $15.565 billion and $15.753 billion, representing an increase of 1.0% to 0.3% over initial forecasts. Adjusted EBITDA is projected to be between $2.154 billion and $2.226 billion, reflecting an increase of 11.5% to 10.3%. Adjusted EPS is expected to be between $15.40 and $16.20, an increase of 18.5% to 15.7%.
UHS remains focused on strategic investments and operational efficiencies to sustain its growth trajectory in the evolving healthcare landscape.
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