HCA's stock price drops $10.53 after posting a $300 million third-quarter shortfall

HCA Healthcare’s third quarter earnings report was not as strong as analysts anticipated. The Nashville-based for-profit company on Oct. 24 reported $3.91 earnings per share during the quarter, 8 cents shy of Yahoo Finance estimates.

The report led the stock to tumble, dropping $10.53 per share from close Oct. 23 to end of day Oct. 24. HCA’s share price was $230.06, its lowest point since November 2022. HCA brought in $16.2 billion in revenue during the third quarter.

HCA bought the Mission Health system in 2019 for $1.5 billion.

HCA executives blamed the losses on operating results with Valesco, a staffing venture that HCA acquired a larger stake in earlier this year. The venture cost investors $100 million in earnings before interest, taxes, depreciation and amortization, also known as EBITDA, this quarter, HCA Chief Financial Officer Bill Rutherford told investors during the Oct. 24 earnings call.

Rutherford estimated that the company will endure a $50 million per quarter loss from the venture moving forward.

“We are working diligently on multiple efforts to address these results, including making programming adjustments where necessary, deploying efforts to reduce the cost structure, and working with payers for more appropriate reimbursement,” Rutherford said.

Valesco’s struggles was not the only reason HCA came around $300 million short of the revenue it collected during the same period in 2022. HCA included money it received from a Florida hospital funding program in its profit summary statistics, according to the news release.

HCA executives attribute the part of the remaining $200 million shortfall to an increase in fees for contract workers, which Rutherford estimated grew 20% during the year. The company also attributed some of the difference to changes in supplemental payment programs.

Even though the quarter fell short of investors’ hopes, HCA executives remained steadfast that the company was in a strong position for the future.

“We believe our core business metrics remain solid,” Rutherford said.

During the call, Rutherford and Sam Hazen, the company’s chief executive officer, touched on several elements of HCA’s corporate playbook that are taking hold in Western North Carolina.

Hazen mentioned a plan to revitalize the company’s emergency rooms initiated roughly a year ago. He touted improved throughput times for patients in the emergency department.

“I think we're seeing an ER patient within nine or 10 minutes with a clinician, as soon as they present to our door,” Hazen said.

He also said that freestanding emergency rooms “continue to perform at a high level.”

The Citizen Times previously reported that patients arriving in ambulances at Mission Hospital are waiting long periods of time before they receive care. Mission Hospital workers and local emergency services leaders attribute the long wait times mostly to staffing challenges in the hospital, which cause patient flow problems.

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HCA is also looking for state certifications on two freestanding emergency departments in Buncombe County.

Nurses at Mission Hospital unionized September 2020, becoming part of National Nurses United. The union held a rally in September to urge HCA to commit more resources to the hospital and hire more staff.

“Unionization across the country beyond the health care industry is an issue as everybody understands,” Hazen said, responding a question about wage trends. “But we have been successful in pushing through those issues organizationally and have landed in a spot that we think is not going to put too much pressure on our business in the near term.”

HCA will be holding its investor day Nov. 9.

Mitchell Black covers Buncombe County and health care for the Citizen Times. Email him at mblack@citizentimes.com or follow him on Twitter @MitchABlack. Please help support local journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: HCA's stock price drops $10.53 following third quarter earnings call