HCA Shares Rise on Settlement, Promising 1Q Forecast

By Features FOXBusiness

HCA Holdings (HCA) expects to report first-quarter sales below Wall Street expectations.

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However, the company’s shares rose nearly 2.5% Thursday after HCA said a recent settlement will give a boost to its Medicare revenue and core earnings will surpass average analyst estimates.

HCA said quarterly results will reflect two separate adjustments related to Medicare revenue for prior periods, which is expected to result in increases of about $188 million on revenue, $170 million in adjusted core earnings and about 22 cents to earnings per share.

That is related to years-long litigation settled in its favor over certain parts of the Balanced Budget Act of 1997. The agreement, reached on April 5, provides HCA with additional Medicare payments of about $271 million by June 30.

The Nashville, Tenn.-based operator of hospitals, surgery centers and other healthcare facilities said it expects to report revenue of $8.38 billion to $8.43 billion, compared with $7.4 billion in the year-earlier period.

Analysts in a Thomson Reuters poll are looking for sales of $8.71 billion.

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The largest U.S. hospital operator forecasts earnings before interest, taxes, depreciation and amortization for the first quarter between $1.79 billion and $1.84 billion, compared with $1.59 billion the same time in 2011.

The Street is expecting core earnings of $1.62 billion.