The first major hospital chain to post second-quarter results surprised Wall Street on Tuesday with how much it has grown since a rapidly spreading pandemic curtailed surgeries and other care last year.
HCA Healthcare said Tuesday that admissions to its hospitals soared while COVID-19 related care fell in the three-month window that ended June 30. That contributed to better-than-expected earnings in the quarter and a raised forecast for 2021.
“With the effects of the pandemic moderating … we experienced a strong rebound in demand for services,” CEO Sam Hazen said.
That rebound happened largely before COVID-19 cases started climbing around the country over the past few weeks, drawing concern from federal officials and epidemiologists. The seven-day rolling average for daily new cases has nearly tripled over the past two weeks to 34,730 as of Monday, according to Johns Hopkins University.
COVID-19 cases are now increasing in nearly every state as a highly contagious virus variant spreads, leaving millions of still unvaccinated people vulnerable to serious illness or hospitalization.
Even so, company officials told analysts on Tuesday that they expect demand for their services to remain strong throughout the year. That demand has been fueled in part by growth in employment and insurance coverage.
About 68% of U.S. adults also have received at least one dose of a COVID-19 vaccine, according to the Centers for Disease Control and Prevention.
Last year, before vaccines were authorized for emergency use, patients stayed home or cancelled elective surgeries and other care.
HCA runs 187 hospitals as well as hundreds of surgery centers, free-standing emergency rooms and clinics in 20 states and the United Kingdom.
The company said Tuesday that inpatient surgeries at established locations grew 15% compared to last year’s second quarter, and outpatient surgeries soared more than 52%.
Meanwhile, COVID-19 patient admissions fell to 3% of total admissions during the quarter. That’s down from 10% in the first quarter.
Overall, HCA’s adjusted earnings before interest, taxes, depreciation and amortization grew about 21% to $3.22 billion. That compares to $2.67 billion in last year’s quarter, when the company also booked $822 million in government stimulus income that it has since paid back.
Adjusted earnings totaled $4.37 per share in this year’s second quarter, and revenue grew 30% to $14.44 billion.
Analysts expected, on average, earnings of $3.16 per share on $13.61 billion in revenue, according to FactSet.
For 2021, HCA now expects earnings to range between $16.30 and $17.10 per share after forecasting $13.30 to $14.30 in April.
Wall Street forecasts $14.02 per share.
Citi analyst Ralph Giacobbe called the results a “blowout.”
“The performance and magnitude of upside is impressive and we expect shares to trade higher,” Giacobbe said in a research note.
Shares of Nashville, Tennessee-based HCA Healthcare Inc. jumped more than 15% to approach $252 and set another all-time high price on Tuesday while broader indexes were up over 1%.
Hospital operators like HCA have largely outpaced the broader market since last November. That’s when drugmakers released clinical study results on their experimental COVID-19 vaccines and gave investors initial hints that the pandemic could be brought under control.
HCA competitor Tenet Healthcare Corp. will detail its second-quarter results Wednesday after markets close while another hospital chain, Community Health Systems Inc., reports next week.
Follow Tom Murphy on Twitter: @thpmurphy