(Reuters) -Universal Health Services beat Wall Street estimates for third-quarter profit on Monday, driven by steady demand for medical care services at its hospitals, sending its shares surging 6% in extended trading.
Health insurers have flagged elevated demand and rising costs in individual Affordable Care Act, also known as Obamacare, and Medicaid plans for low-income individuals, trends that are expected to benefit hospital operators.
For the quarter ended September 30, the King of Prussia, Pennsylvania-based hospital operator reported an adjusted profit of $5.69 per share, beating estimates of $4.84 per share, according to LSEG data.
Last week, larger peer HCA Healthcare also beat quarterly profit estimates, though it noted Medicaid volumes remained low and were offset by strength in its Medicare business.
UHS said its results included a $90 million pre-tax reimbursement tied to a newly approved Medicaid state-directed payment program in Washington, D.C. The payment covered services provided over the past year and was not part of its earlier forecast.
However, the company also took a $35 million pre-tax charge to increase reserves for self-insured liabilities due to unfavorable claims trends.
Same-facility adjusted admissions rose 2% at its acute care hospitals during the quarter, while admissions at behavioral healthcare facilities grew by 0.5%.
The company raised its 2025 revenue forecast to between $17.31 billion and $17.45 billion, up from its prior range of between $17.10 billion and $17.31 billion. Analysts, on average, expect 2025 revenue of $17.21 billion.
The company’s board also authorized a $1.5 billion increase to its stock buyback plan.
(Reporting by Kamal Choudhury in Bengaluru; Editing by Anil D’Silva)
