Group 1 - HCA Healthcare's shares have experienced volatility over the past year but have still achieved a 5% gain [1] - Congressional Republicans are intensifying efforts on a budget reconciliation bill aimed at tax cuts, which may impact the healthcare sector [1]

Our latest available data shows that HCA has returned about 15.1% since the start of the calendar year. Meanwhile, stocks in the Medical group have gained about 3.1% on average. This means that HCA Healthcare is performing better than its sector in terms of year-to-date returns. The Medical group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has HCA Healthcare (HCA) been one of those stocks this year? A quick glance at the company's year ...

Financial Performance - Net income for HCA Healthcare, Inc. in 2024 was $5.760 billion, or $22.00 per diluted share, compared to $5.242 billion, or $18.97 per diluted share in 2023, reflecting a year-over-year increase of 9.8% in net income [314]. - Total revenues increased to $70.603 billion in 2024, up 8.7% from $64.968 billion in 2023, driven by a 5.3% increase in equivalent admissions and a 3.2% increase in revenue per equivalent admission [315]. - Revenues increased by 8.7% to $70.603 billion for 2024 from $64.968 billion for 2023, driven by a 5.3% increase in equivalent admissions and a 3.2% increase in revenue per equivalent admission [348]. - Net income attributable to HCA Healthcare, Inc. was $5.760 billion, or $22.00 per diluted share, for 2024, compared to $5.242 billion, or $18.97 per diluted share, for 2023 [371]. Admissions and Patient Volume - Consolidated admissions rose by 5.0% in 2024, with inpatient surgical volumes increasing by 2.2%, while outpatient surgical volumes declined by 1.9% [316]. - Consolidated admissions increased by 5.0% during 2024 compared to 2023, with inpatient surgical volumes increasing by 2.2% [350]. - Same facility admissions increased by 4.9% in 2024 compared to 2023 [372]. - Average daily census increased to 29,581 in 2024 from 28,721 in 2023, reflecting higher patient volume [367]. - Emergency room visits increased by 4.8% on a consolidated basis in 2024 compared to 2023, totaling 9,789,265 visits [372]. - Same facility uninsured emergency room visits increased by 13.5% during 2024 compared to 2023 [352]. Financial Expenses and Liabilities - Interest expense for 2024 totaled $2.061 billion, an increase of $123 million from $1.938 billion in 2023, primarily due to a higher average debt balance [318]. - Interest expense rose to $2.061 billion in 2024 from $1.938 billion in 2023, primarily due to an increase in average debt balance [379]. - Professional liability provisions for the current year claims were $545 million for 2024, compared to $573 million for 2023 [343]. - Reserves for professional liability risks were $2.131 billion at December 31, 2024, compared to $2.089 billion at December 31, 2023, with a current portion of $587 million [342]. - The estimated total net reserves for professional liability risks at December 31, 2024, included $1.059 billion for case reserves for known claims and $992 million for reserves for incurred but not reported claims [342]. Operating Activities and Cash Flow - Cash flows from operating activities increased by $1.083 billion to $10.514 billion in 2024, attributed to a $542 million increase in net income and a positive change in working capital items [319]. - Cash provided by operating activities totaled $10.514 billion in 2024, an increase of $1.083 billion compared to $9.431 billion in 2023 [384]. - Cash used in investing activities was $4.933 billion in 2024, compared to $5.317 billion in 2023 [385]. - Cash used in financing activities totaled $4.582 billion in 2024, up from $4.094 billion in 2023 [388]. Strategic Initiatives - HCA Healthcare plans to expand its presence in existing markets by developing outpatient facilities and comprehensive service lines, including cardiology and oncology [320]. - The company aims to achieve industry-leading performance in clinical and operational measures through initiatives focused on patient safety and satisfaction [322]. - HCA Healthcare emphasizes recruiting and retaining healthcare professionals to ensure high-quality services, supported by advanced technology and expanded specialty services [323]. - The company intends to pursue a disciplined development strategy, focusing on selectively developing and acquiring new hospitals and outpatient facilities to capitalize on growth opportunities [325]. Cost and Revenue Ratios - The cost-to-charges ratio for patient care costs was 10.1% for 2024, down from 10.5% in 2023 [334]. - Salaries and benefits as a percentage of revenues decreased to 44.1% in 2024 from 45.4% in 2023 [374]. - Other operating expenses increased to 21.0% of revenues in 2024 from 19.8% in 2023, primarily due to increased costs for state provider fees and repairs related to Hurricane Milton [376]. Long-term Debt and Tax Matters - Total long-term debt was $43.031 billion at December 31, 2024, compared to $39.593 billion at December 31, 2023 [394]. - The estimated fair value of total long-term debt was $40.845 billion at December 31, 2024 [406]. - The average effective interest rate for long-term debt remained at 5.0% for both 2024 and 2023 [379]. - The IRS completed examinations of the company's 2016, 2017, and 2018 income tax returns, resolving all federal income tax matters for those years [408]. - As of December 31, 2024, the IRS is examining the company's 2022 and 2023 income tax returns, along with the 2019 returns of certain affiliates [408]. - The company believes it has properly reported taxable income and paid taxes in accordance with applicable laws, minimizing potential adverse effects on financial position [408]. - Future tax resolutions could materially impact the company's results if payments exceed recorded estimates [408].

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]