Group 1: Market Overview - Equity markets have experienced volatility due to competition from Chinese companies in the AI sector, which significantly impacts indexes like the Nasdaq Composite [1] - The Trump administration's potential tariffs on various countries may lead to retaliatory actions, further affecting stock market performance [1] Group 2: Johnson & Johnson - Johnson & Johnson operates in the defensive healthcare industry, which remains stable during market downturns as demand for medical services persists [3] - The company is a pharmaceutical leader with a diverse portfolio, including drugs that generate over $1 billion in annual sales across various therapeutic areas [4] - Johnson & Johnson's medical devices segment also contributes to its stability, providing essential services that are less affected by economic fluctuations [5] - The company has a strong track record of revenue and earnings growth, supported by its ability to innovate in medicines and medical devices [6] - Johnson & Johnson is nearing a settlement for over 99.75% of lawsuits related to its talc-based products, which may alleviate some legal pressures [6] - The company has consistently delivered strong financial results and has a history of increasing dividends for 62 consecutive years, making it a reliable investment during downturns [8] Group 3: HCA Healthcare - HCA Healthcare is a leading hospital chain in the U.S., with a significant presence in Texas and Florida, and its services remain in demand during economic downturns [9] - While elective surgeries may decline during recessions, the overall need for hospital services remains high, ensuring steady demand for HCA Healthcare [10] - The company has successfully increased its market share from 26.5% in 2019 to approximately 28% in 2021, demonstrating resilience during challenging times [10] - HCA Healthcare benefits from established relationships with third-party payers, patients, and physicians, providing a competitive advantage in the industry [12] - Projections indicate that hospital spending will continue to rise, positioning HCA Healthcare to capitalize on this long-term trend and deliver strong returns for investors [13]

Core Insights - HCA Healthcare Inc. reported better-than-expected earnings for Q4, with revenues of $18.29 billion, a 5.7% year-over-year increase, and adjusted EPS of $6.22, surpassing consensus estimates [1][2] - The company forecasts 2025 EPS between $24.05 and $25.85, with a sales outlook of $72.8 billion to $75.8 billion, indicating continued growth [2][3] Financial Performance - Q4 revenues reached $18.29 billion, exceeding the consensus of $18.23 billion [1] - Adjusted EPS for Q4 was $6.22, up from $5.90 a year ago, surpassing the consensus of $6.13 [1] - For 2025, HCA expects a net profit of $5.85 billion to $6.29 billion and adjusted EBITDA of $14.30 billion to $15.10 billion [3] Future Outlook - Capital expenditures for 2025 are estimated at approximately $5.0 billion to $5.2 billion, excluding acquisitions [3] - Analysts have adjusted their price targets post-earnings, with Barclays lowering its target from $392 to $366 while maintaining an Overweight rating, and Cantor Fitzgerald maintaining a $405 target [3]

Core Insights - Michael Dion is an expert in FP&A, Corporate Finance, and Small Business with 12 years of experience in Fortune 100 companies and various industries [1] - He founded F9 Finance to assist finance professionals and small business owners in understanding finance and accounting concepts [1] - Dion's investment strategy focuses on identifying value opportunities where market reactions to news are disproportionate, emphasizing strong fundamentals and dividends [1] Industry Insights - The finance and accounting sectors are increasingly recognizing the importance of cash flow for both companies and investors [1] - There is a growing trend among investors to seek value in companies that are mispriced due to market overreactions [1]

HCA Healthcare's Financial Performance - Adjusted EPS for Q4 2024 was $6.22, surpassing the Zacks Consensus Estimate by 4.2% and increasing 5.4% YoY [1] - Revenues rose 5.7% YoY to $18.3 billion, beating the consensus mark by 1.1% [2] - Full-year 2024 revenues increased 8.7% YoY to $70.6 billion, with adjusted EPS rising 15.5% YoY to $21.96 [11] - Adjusted EBITDA for 2024 improved 9.1% YoY to $13.9 billion [11] Operational Highlights - Same-facility equivalent admissions grew 3.1% YoY, while same-facility admissions increased 3% YoY in Q4 2024 [3] - Same-facility revenue per equivalent admission rose 2.9% YoY, exceeding the growth estimate of 2.7% [3] - Same-facility inpatient surgeries increased 2.8% YoY, outpacing the growth estimate of 2.1% [4] - Same-facility emergency room visits rose 2.4% YoY in Q4 2024 [4] Expenses and EBITDA - Salaries and benefits, supplies, and other operating expenses increased 6.3% YoY to $14.6 billion, higher than the estimate of $14.4 billion [4] - Adjusted EBITDA for Q4 2024 improved 2.6% YoY to $3.7 billion [4] Financial Position and Capital Deployment - Cash and cash equivalents at the end of Q4 2024 were $1.9 billion, more than double the 2023-end level [6] - Total assets increased 5.9% YoY to $59.5 billion [6] - Long-term debt rose 3.1% YoY to $38.3 billion [6] - Capital expenditures were $1.3 billion, excluding acquisitions [7] - Cash from operations in 2024 advanced 11.5% YoY to $10.5 billion [8] - HCA bought back shares worth $1.7 billion in Q4 2024 and approved a new $10 billion share repurchase program [9] - Quarterly cash dividend increased 9.1% to 72 cents per share, payable on March 31, 2025 [10] 2025 Guidance - Annual revenues for 2025 are expected to be between $72.8 billion and $75.8 billion, indicating a 5.2% rise at the midpoint [12] - Adjusted EBITDA for 2025 is projected to be in the range of $14.3-$15.1 billion, with a midpoint growth of 5.9% [12] - Net income attributable to HCA Healthcare is expected to be between $5.85 billion and $6.29 billion [12] - EPS is forecasted to be in the $24.05-$25.85 range, implying a 13.6% rise at the midpoint [13] - Capital expenditures, excluding acquisitions, are expected to be within $5-$5.2 billion [13] Industry Updates - UnitedHealth Group reported Q4 2024 adjusted EPS of $6.81, beating the consensus estimate by 1.5% and increasing 10.6% YoY [16] - UnitedHealth's revenues rose 6.8% YoY to $100.8 billion, though it missed the consensus mark by 1.4% [16] - Elevance Health reported Q4 2024 adjusted EPS of $3.84, surpassing the consensus estimate by 1.1%, but declining 31.7% YoY [18] - Elevance Health's operating revenues increased 6% YoY to $45 billion, slightly beating the consensus mark [18] Upcoming Earnings - Merit Medical Systems is scheduled to report Q4 2024 earnings on Feb 25, with a Zacks Consensus Estimate of 83 cents per share, indicating a 2.5% rise YoY [21][22]

Financial Data and Key Metrics Changes - The company reported significant changes in financial metrics, with a focus on revenue growth and profitability margins [4]. Business Line Data and Key Metrics Changes - Specific business lines showed varied performance, with some segments outperforming expectations while others faced challenges [4]. Market Data and Key Metrics Changes - The company highlighted changes in market dynamics, including shifts in demand and competitive pressures that impacted overall performance [4]. Company Strategy and Development Direction - The management discussed strategic initiatives aimed at enhancing operational efficiency and expanding market share, particularly in high-growth areas [4]. Management Comments on Operating Environment and Future Outlook - Management provided insights into the current operating environment, noting challenges but expressing optimism about future growth prospects [4]. Other Important Information - Additional information included updates on regulatory changes and their potential impact on operations and financial performance [4]. Q&A Session Summary Question: What are the expectations for revenue growth in the upcoming quarters? - Management indicated a cautious but positive outlook, expecting steady revenue growth driven by strategic initiatives and market demand [4]. Question: How is the company addressing competitive pressures? - The company is focusing on innovation and customer service enhancements to maintain a competitive edge in the market [4].

Core Viewpoint - HCA Healthcare reported strong revenue growth in Q4 2024 but missed earnings per share estimates due to the impact of hurricanes on operations [2][6]. Financial Performance - Revenue for Q4 2024 was $18.285 billion, exceeding analyst expectations of $18.234 billion, representing a year-over-year increase of 5.7% from $17.303 billion in Q4 2023 [3][6]. - Diluted earnings per share (EPS) were $5.63, falling short of the expected $6.13, and down 5.1% from $5.93 in Q4 2023 [3][6]. - Adjusted EBITDA for the quarter was $3.712 billion, reflecting a 2.6% increase from $3.618 billion in the previous year [3]. - Net income decreased by 10.5% to $1.438 billion compared to $1.607 billion in Q4 2023 [3]. Operational Highlights - Same-facility admissions increased by 3.0%, and inpatient surgeries grew by 2.8%, indicating strong demand for healthcare services despite external challenges [7]. - Emergency room visits rose by 2.4%, while outpatient surgeries saw a decline of 1.3% [7]. - The company faced revenue losses of approximately $200 million due to Hurricanes Helene and Milton, which significantly impacted operations in North Carolina and Florida [6]. Cash Flow and Share Repurchase - Operating cash flow was reported at $2.559 billion, demonstrating the company's strong cash generation capabilities [8]. - The company continued its share repurchase strategy, buying back 4.739 million shares for $1.7 billion [8]. Future Outlook - For 2025, HCA Healthcare projects revenue between $72.8 billion and $75.8 billion, with EPS expected to range from $24.05 to $25.85, indicating anticipated stability [9]. - Key strategies include investments in AI and digital technologies to enhance operational efficiency and patient care [9]. - The company aims to expand infrastructure with new inpatient and outpatient facilities while refining operational practices to adapt to changing healthcare regulations [10].

Core Insights - HCA Healthcare reported $18.29 billion in revenue for Q4 2024, a year-over-year increase of 5.7% [1] - The EPS for the same period was $6.22, up from $5.90 a year ago, exceeding the consensus estimate of $5.97 by 4.19% [1] Financial Performance - Revenue surpassed the Zacks Consensus Estimate of $18.09 billion, resulting in a surprise of +1.07% [1] - HCA's shares returned +7.5% over the past month, outperforming the Zacks S&P 500 composite's +2.5% change [3] Key Metrics - Revenue per Equivalent Admission was $18,146, exceeding the five-analyst average estimate of $18,036.69 [4] - Equivalent Admissions reached 1.01 billion, surpassing the five-analyst average estimate of 997.59 million [4] - Admissions totaled 559.17 million, slightly below the average estimate of 561.41 million [4] - Equivalent Patient Days were 4.85 million, close to the average estimate of 4.89 million [4] - Average Length of Stay remained at 5 days, matching the two-analyst average estimate [4] - The number of hospitals increased to 190, above the two-analyst average estimate of 187 [4] - Inpatient Revenue per Admission was $19,737, exceeding the average estimate of $19,608.16 [4] - Licensed Beds at the end of the period were 49,985, slightly above the two-analyst average estimate of 49,819 [4] - Patient Days were recorded at 2,691.71, below the average estimate of 2,714.32 [4] - The number of freestanding outpatient surgery centers was 124, slightly below the average estimate of 125 [4]

Group 1: Earnings Performance - HCA Healthcare reported quarterly earnings of $6.22 per share, exceeding the Zacks Consensus Estimate of $5.97 per share, and up from $5.90 per share a year ago, representing an earnings surprise of 4.19% [1] - The company posted revenues of $18.29 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.07%, compared to $17.3 billion in the same quarter last year [2] - Over the last four quarters, HCA has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - HCA shares have increased approximately 8.4% since the beginning of the year, outperforming the S&P 500's gain of 4% [3] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $5.82 on revenues of $18.22 billion, and for the current fiscal year, it is $24.77 on revenues of $74.54 billion [7] Group 3: Industry Context - The Medical - Hospital industry, to which HCA belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact HCA's stock performance [5][6]

[HCA Healthcare Fourth Quarter 2024 Earnings Release](index=1&type=section&id=HCA%20Healthcare%20Fourth%20Quarter%202024%20Earnings%20Release) [Financial and Operating Highlights](index=1&type=section&id=Financial%20and%20Operating%20Highlights) HCA Healthcare achieved strong 2024 financial performance with increased revenues and net income, despite Q4 impacts [Fourth Quarter 2024 Performance](index=1&type=section&id=Fourth%20Quarter%202024%20Performance) Q4 2024 revenues grew to **$18,285 million**, but net income decreased to **$1,438 million** due to special items and hurricane impacts Q4 2024 Key Financial Metrics vs. Q4 2023 (in millions) | Metric | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | Revenues | $18,285 | $17,303 | | Net Income Attributable to HCA | $1,438 | $1,607 | | Diluted EPS | $5.63 | $5.93 | | Adjusted EBITDA | $3,712 | $3,618 | - Q4 2024 results include losses on sales of facilities of **$195 million**, or **$0.59 per diluted share**, primarily from a pending sale in California[2](index=2&type=chunk) Q4 2024 Same Facility Operating Metrics (YoY Change) | Metric | % Change YoY | | :--- | :--- | | Admissions | +3.0% | | Equivalent Admissions | +3.1% | | Emergency Room Visits | +2.4% | | Inpatient Surgeries | +2.8% | | Outpatient Surgeries | -1.3% | | Revenue per Equivalent Admission | +2.9% | [Full Year 2024 Performance](index=2&type=section&id=Full%20Year%202024%20Performance) Full year 2024 revenues grew 8.7% to **$70,603 million**, with net income at **$5,760 million** and Adjusted EBITDA at **$13,882 million** Full Year 2024 Key Financial Metrics vs. Full Year 2023 (in millions) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Revenues | $70,603 | $64,968 | | Net Income Attributable to HCA | $5,760 | $5,242 | | Diluted EPS | $22.00 | $18.97 | | Adjusted EBITDA | $13,882 | $12,726 | [Financial Position and Shareholder Returns](index=2&type=section&id=Financial%20Position%20and%20Shareholder%20Returns) HCA maintained a strong balance sheet with **$59.513 billion** in assets, demonstrating commitment to shareholder returns through significant stock repurchases Balance Sheet Summary (as of Dec 31, 2024, in billions) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $1.933 billion | | Total Assets | $59.513 billion | | Total Debt | $43.031 billion | - The Board of Directors authorized a new share repurchase program for up to **$10 billion** of the company's outstanding common stock[9](index=9&type=chunk) - A quarterly cash dividend of **$0.72 per share** was declared, payable on March 31, 2025[10](index=10&type=chunk) - In Q4 2024, the company repurchased **4.739 million shares** for **$1.700 billion**, with **$764 million** remaining under the previous authorization[8](index=8&type=chunk) [Special Items and Future Outlook](index=3&type=section&id=Special%20Items%20and%20Future%20Outlook) Hurricanes Helene and Milton impacted Q4 2024 by **$200 million**, with HCA's 2025 guidance projecting revenues between **$72.80 billion** and **$75.80 billion** - Hurricanes Helene and Milton caused an estimated **$200 million** in lost revenues and additional expenses in Q4 2024, impacting diluted EPS by approximately **$0.60**[12](index=12&type=chunk) - The total impact of the hurricanes for the full year 2024 was estimated at **$250 million**, or **$0.73 per diluted share**[13](index=13&type=chunk) 2025 Full Year Guidance | Metric | 2025 Guidance Range | | :--- | :--- | | Revenues | $72.80 - $75.80 billion | | Net Income Attributable to HCA | $5.85 - $6.29 billion | | Adjusted EBITDA | $14.30 - $15.10 billion | | EPS (diluted) | $24.05 - $25.85 | | Capital Expenditures | $5.0 - $5.2 billion | [Corporate Information and Disclosures](index=4&type=section&id=Corporate%20Information%20and%20Disclosures) HCA operates 190 hospitals and 2,400 ambulatory sites, with its 2025 annual stockholders' meeting on April 24, and forward-looking statements subject to risks - As of December 31, 2024, HCA operated **190 hospitals** and approximately **2,400 ambulatory sites** of care across 20 states and the United Kingdom[19](index=19&type=chunk) - The 2025 annual stockholders' meeting is scheduled to be held virtually on **April 24, 2025**[17](index=17&type=chunk) - The press release contains forward-looking statements based on current plans and expectations, which are subject to significant risks and uncertainties detailed in the document and SEC filings[20](index=20&type=chunk)[21](index=21&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) HCA's consolidated financial statements for Q4 and full-year 2024 show revenue growth, increased assets and liabilities, and strong operating cash flow [Condensed Consolidated Comprehensive Income Statements](index=6&type=section&id=Condensed%20Consolidated%20Comprehensive%20Income%20Statements) Q4 2024 revenues were **$18,285 million** with **$1,438 million** net income; full year 2024 revenues reached **$70,603 million** with **$5,760 million** net income Q4 2024 vs Q4 2023 Income Statement Highlights (in millions) | Account | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | Revenues | $18,285 | $17,303 | | Salaries and benefits | $7,917 | $7,570 | | Other operating expenses | $3,873 | $3,559 | | Income before income taxes | $2,133 | $2,345 | | Net Income Attributable to HCA | $1,438 | $1,607 | Full Year 2024 vs 2023 Income Statement Highlights (in millions) | Account | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Revenues | $70,603 | $64,968 | | Salaries and benefits | $31,170 | $29,487 | | Other operating expenses | $14,819 | $12,875 | | Income before income taxes | $8,523 | $7,706 | | Net Income Attributable to HCA | $5,760 | $5,242 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2024, HCA's total assets increased to **$59,513 million**, with cash and property growth, and a rise in total liabilities Balance Sheet Comparison (in millions) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,933 | $935 | | Total Current Assets | $16,414 | $14,927 | | Property and equipment, net | $29,414 | $27,715 | | Total Assets | $59,513 | $56,211 | | Long-term debt | $38,333 | $37,169 | | Total Liabilities | $58,958 (a) | $55,151 (a) | | Total Stockholders' Equity | $555 | $1,060 | (a) Calculated as Total Assets - Total Stockholders' Equity [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities for 2024 was **$10,514 million**, funding significant investing and financing activities, including **$6,042 million** in stock repurchases Cash Flow Summary for Full Year (in millions) | Activity | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $10,514 | $9,431 | | Net cash used in investing activities | ($4,933) | ($5,317) | | Net cash used in financing activities | ($4,582) | ($4,094) | | Change in cash and cash equivalents | $998 | $27 | - Key uses of cash in financing activities for 2024 included **$6.042 billion** for stock repurchases and **$690 million** for dividend payments[26](index=26&type=chunk) [Operating Statistics](index=10&type=section&id=Operating%20Statistics) HCA expanded to 190 hospitals in 2024, with full-year same-facility admissions and equivalent admissions showing positive growth Full Year 2024 Same Facility Key Metrics (% Change YoY) | Metric | % Change YoY | | :--- | :--- | | Admissions | +4.9% | | Equivalent Admissions | +4.5% | | Revenue per Equivalent Admission | +3.2% | | Inpatient Surgery Cases | +2.2% | | Outpatient Surgery Cases | -1.6% | | Emergency Room Visits | +4.9% | Q4 2024 Same Facility Key Metrics (% Change YoY) | Metric | % Change YoY | | :--- | :--- | | Admissions | +3.0% | | Equivalent Admissions | +3.1% | | Revenue per Equivalent Admission | +2.9% | | Inpatient Surgery Cases | +2.8% | | Outpatient Surgery Cases | -1.3% | | Emergency Room Visits | +2.4% | [Supplemental Non-GAAP Disclosures](index=11&type=section&id=Supplemental%20Non-GAAP%20Disclosures) HCA uses non-GAAP Adjusted EBITDA for performance assessment, reporting **$13,882 million** for FY 2024 and forecasting **$14,300 million** to **$15,100 million** for 2025 [Reconciliation of Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Q4 2024 Adjusted EBITDA was **$3,712 million** (20.3% margin), with full-year 2024 reaching **$13,882 million** (19.7% margin) Adjusted EBITDA Performance (in millions) | Period | Adjusted EBITDA | Adjusted EBITDA Margin | | :--- | :--- | :--- | | Q4 2024 | $3,712 | 20.3% | | Q4 2023 | $3,618 | 20.9% | | FY 2024 | $13,882 | 19.7% | | FY 2023 | $12,726 | 19.6% | - Management uses Adjusted EBITDA as a primary measure to assess the operating performance of its healthcare facilities[31](index=31&type=chunk)[32](index=32&type=chunk) [2025 Operating Results Forecast (Non-GAAP)](index=12&type=section&id=2025%20Operating%20Results%20Forecast%20%28Non-GAAP%29) The 2025 forecast projects Net Income Attributable to HCA between **$5,850 million** and **$6,290 million**, with Adjusted EBITDA ranging from **$14,300 million** to **$15,100 million** 2025 Forecast Reconciliation: Net Income to Adjusted EBITDA (in millions) | Metric | Low Range | High Range | | :--- | :--- | :--- | | Net income attributable to HCA | $5,850 | $6,290 | | Depreciation and amortization | $3,495 | $3,565 | | Interest expense | $2,230 | $2,320 | | Provision for income taxes | $1,800 | $1,950 | | Net income attributable to noncontrolling interests | $925 | $975 | | **Adjusted EBITDA** | **$14,300** | **$15,100** | - The company does not forecast certain items like gains/losses on sales of facilities, legal costs, or impairments due to the inability to predict them with sufficient accuracy[38](index=38&type=chunk)

Earnings and Financial Performance - HCA Healthcare is expected to report quarterly earnings of $6 14 per share for Q4 2025, up from $5 90 per share in the same period last year [1] - The company projects revenue of $18 23 billion for the recent quarter, compared to $17 3 billion a year earlier [1] Stock Performance and Analyst Ratings - HCA Healthcare shares gained 1 8% to close at $325 36 on Thursday [3] - Truist Securities analyst David Macdonald maintained a Buy rating but cut the price target from $430 to $390 [5] - Raymond James analyst John Ransom downgraded the stock from Outperform to Market Perform [5] - Keybanc analyst Matthew Gillmor maintained an Overweight rating but cut the price target from $475 to $420 [5] - Oppenheimer analyst Michael Wiederhorn maintained an Outperform rating and raised the price target from $390 to $400 [5] - Deutsche Bank analyst Pito Chickering maintained a Buy rating and raised the price target from $359 to $375 [5] Leadership Changes - HCA Healthcare named Wendy Warren as Senior Vice President and Chief Ethics and Compliance Officer on Dec 20, 2024 [2]