lowered its second-quarter earnings estimate Tuesday, citing an increase in the expected allowance for doubtful accounts, but the hospital owner's shares were higher in afternoon trading as the company's revenue guidance remained solid.
The company said its financial results for the second quarter ended June 30 will include a pretax increase to the estimated allowance for doubtful accounts of $106 million, or 13 cents a share. The new estimate is based on an analysis in which HCA reviews its accounts receivable during a previous 12-month period.
"We continue to see an increasing percentage of the company's receivables being comprised of uninsured accounts while the collectibility associated with this specific category of our receivables is deteriorating," HCA said in a press release. "In addition, co-pays and deductibles have continued to grow, thereby increasing the percentage of our receivables which are at risk of collection. At the same time, the company has been very effective in accelerating the payment of insurance claims from virtually all payers."
HCA now expects to earn 46 cents to 48 cents a share for the second quarter, including the 13-cent adjustment. The company plans to report its results July 22. Excluding the adjustment and a separate charge, the company would earn 74 cents to 76 cents a share, compared with 66 cents in the year-ago period.
The company also expects to report a revenue increase of about 11.5% to $5.5 billion. Same-facility revenue rose around 7.1% in the second quarter, while same-facility admissions were up 0.6%.
Analysts polled by Thomson First Call are looking for a profit of 77 cents on revenue of $5.47 billion in the second quarter.
Shares of HCA were lately up $1.46, or 4.5%, to $33.68.