Shares of HCA Healthcare (NYSE:HCA) fell nearly 10% after third-quarter results fell short of expectations, weighing down rivals. Sales rose 8% to $17.5 billion, but the company missed expectations by $50 million, largely due to disruptions from hurricanes Helen and Milton. The storm caused a $50 million hit to HCA's revenue, with further impact expected in the fourth quarter, prompting the company to revise its full-year outlook to the lower end of its guidance range. The hit was a stark reminder that natural disasters can strike even the giants of the medical industry.
There were bright spots on the business side, with adjusted EBITDA increasing 13% year over year to $3.3 billion and margins improving. However, reflecting the impact of the hurricane, earnings per share came in at $4.88, below target by $0.10. Although hospitalizations increased steadily by 4.5%, outpatient surgeries decreased by 2%, highlighting mixed results in the field. HCA is adjusting its expectations to the lower end of its previously provided guidance range of earnings of $21.60 to $22.80 per share and revenue of $69.75 to $71.75 billion.
The news sent ripples through the healthcare industry, with Universal Health Services, Tenet Healthcare and others feeling the shock. For investors, HCA's quarter set off alarm bells. Resilience is key, but even the best-laid plans can be thwarted when Mother Nature strikes. As healthcare settings prepare for increasingly unpredictable weather events, a focus on operational agility and risk management has never been more important.
This article first appeared on GuruFocus.
