Shares of Universal Health (NYSE:UHS) are down more than 12% in premarket trading Tuesday after the company reported worse-than-expected adjusted EPS for the first quarter.
The healthcare provider reported Q1 adjusted EPS of $2.15, down from $2.44 in the year-ago quarter and missing the consensus projection of $2.45 per share. Net revenue came in at $3.29 billion, up 9.3% YoY and above the expected $3.25 billion.
“Our operating results during the first quarter of 2022 reflect continued uncertainties related to the COVID-19 pandemic as well cost escalations related to the nationwide shortage of nurses and other clinical staff and support personnel,” the company said in a press release.
“As a result, our labor costs were higher than anticipated, and patient volumes at our behavioral health care facilities were lower than anticipated, which unfavorably impacted our operating results during the first quarter of 2022.”
Although the company said it didn’t change its 2022 operating results forecast, it warned that it may be forced to “make reductions to our 2022 full year operating results forecast at a future date if the unfavorable operating trends experienced during the first quarter of 2022 do not improve.”
Citi analyst Jason Cassorla took note of “another difficult quarter” for UHS. The analyst expects the UHS stock to be under pressure after earnings.
RBC analyst Ben Hendrix said:
“UHS 1Q22 results fell below expectations on familiar labor cost headwinds, which offset decent organic volume growth in the acute care segment. Meanwhile, in the behavioral segment, unavailability of nursing staff created capacity constraints, which pressured volumes. With the initial guide still within reach, management has maintained its full year outlook for now, but noted that a guide-down could come in the future if the labor backdrop does not improve.”
By Senad Karaahmetovic