surged 8% late Monday after the hospital chain boosted first-quarter earnings guidance and set plans to sell 10 hospitals.
HCA said it would make 88 cents to 93 cents a share for the quarter, up sharply from 69 cents a year ago and comfortably ahead of the 76-cent Wall Street consensus estimate quoted by Thomson First Call.
"Operating results for the quarter are expected to benefit from the combined impact of increased patient volume, effective expense management, improved bad debt trends (slowing rate of increase in uninsured admissions compared to the first quarter of 2004 and a continued moderation in the growth rate associated with the uncollectibility of self-pay receivables) and a reduction in shares," the Nashville, Tenn., company said.
HCA also hired Merrill Lynch to help it divest itself of 10 acute-care hospitals in six states. The 10 hospitals had 2004 revenue of $654 million. HCA's revenue last year was $23.5 billion.
"The divestitures will allow the Company to redeploy capital to support our hospitals in growing urban markets," said CEO Jack Bovender. "These facilities are viable community assets. We believe that increased focus and attention and the ability to continue to successfully compete for capital should provide these facilities the best opportunity for success in the future. Many of the facilities to be divested have been a part of HCA for several years and, although it was a difficult decision, we believe the divestitures are in the best long-term interests of the Company, the affected hospitals and their local communities."
Four hospitals are in West Virginia and two in Tennessee, with the rest located in Virginia, Louisiana, Oklahoma and Washington.
Late Monday, HCA jumped $4.13 to $53.