HCA’s Profit Grows 25% in 4th Quarter
HCA-The Healthcare Co., the biggest U.S. hospital chain, said fourth-quarter profit rose 25% as it raised prices for insurers, admitted more patients and held down costs.
Profit from operations rose to $198 million, or 35 cents a share, from $159 million, or 28 cents, a year earlier, beating the 34-cent average estimate of analysts surveyed by First Call/Thomson Financial.
Revenue rose 5.9% to $4.2 billion at HCA, which changed its name from Columbia/HCA Healthcare last year after settling part of a Medicare fraud investigation.
Admissions rose 1.8% for hospitals owned for more than a year. HCA has increased profit by investing in emergency rooms and high-margin services such as cardiology. It also has worked to cut costs by computerizing back-office functions such as billing and handling of supplies.
HCA expects earnings growth in the mid-teens this year and a 4% to 6% increase in revenue, Chief Executive Jack Bovender said.
Bovender said the company expects to continue to raise prices for managed-care insurers and to receive a 2% increase in payments from Medicare, the government health-insurance program for the elderly.
HCA also said it agreed to buy the 200-bed Healthsouth Medical Center in Richmond, Va., from Healthsouth Corp. Terms weren’t disclosed. HCA, which owns about 200 hospitals, said it will consider other acquisitions this year.
HCA reached an $840-million settlement of the government fraud investigation in the quarter. The settlement includes $745 million in civil payments the company already had agreed to pay and $95 million in criminal fines.
The settlement covers allegations that HCA overbilled Medicare for laboratory and home-health services and inflated the seriousness of pneumonia cases to get more reimbursement.
Still unresolved are civil allegations that HCA filed fraudulent annual cost reports with Medicare and paid doctors kickbacks to refer patients to its hospitals.
Shares of the company, based in Nashville, rose $1.40 to close at $39 on the New York Stock Exchange. The shares rose 50% last year.
At a Glance
Other earnings, excluding one-time gains or charges unless noted:
* Boston Scientific Corp., a leading maker of products to clear heart arteries, said fourth-quarter profit fell 19% to $87 million, or 22 cents a share, a penny lower than analyst expectations. Sales fell 11% to $638 million. The company has been losing market share as rivals introduce new stents, metal-mesh tubes used to keep cleared arteries open.
* Drugstore chain CVS Corp. said fourth-quarter profit grew 12% to $209.5 million, or 51 cents a share, as sales rose 5.9% to $5.49 billion.
* CNet Networks Inc. reported a fourth-quarter operating profit in line with expectations but cut its revenue forecast for 2001 and said it will cut about 190 workers, or about 10% of its staff. The company, which produces Web sites and TV shows about computers, had pro forma profit of $13.2 million, or 9 cents a share, versus a loss of $25.7 million, or 21 cents, a year ago as revenue almost tripled to $111 million from $38.3 million. CNet reduced its revenue expectations for the year by as much as a fifth. The results were released after the markets closed.
* Marriott International Inc. said fourth-quarter profit rose 66% to $149 million, or 59 cents a share, matching forecasts, on higher room occupancy and rates at its hotels. Revenue rose 12% to $3.16 billion.
