HCA Delivers Solid Quarter

Earnings are flat but better than hoped.
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HCA's

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fourth-quarter earnings were little changed from a year ago, a better-than-expected result that reflected lower bad-debt reserves and a moderating rate of uninsured admissions.

The hospital operator earned $322 million, or 70 cents a share, in the quarter, compared with $317 million, or 63 cents a share, last year. Revenue jumped 6.1% from a year ago to $5.94 billion.

Analysts had been forecasting earnings of 66 cents a share on revenue of about $5.93 billion. The per-share forecast probably isn't directly comparable to HCA's bottom line of 70 cents because of various special items.

HCA previewed the solid quarter on Jan. 12, citing a refinement in the way it figures out the bad-debt number, plus a lower tax rate and share count. The stock is up about 13% from the day before that news.

In its release Tuesday, HCA said same-facility uninsured admissions rose 3.7% in the fourth quarter of 2004 from a year earlier, down from a 7.2% year-over-year increase in the third quarter and a 15.2% increase in the second quarter. Same facility uninsured emergency room visits rose 3.8% in the fourth quarter over 2003, compared with gains of 11.4% in the third quarter and 16.9% in the second.

HCA's results were tempered somewhat by a lower rate of flu-related admissions, down 18.3% from a year ago. Overall same-facility admissions were down 1.4% from last year's "strong" flu season.