Universal Health Services falls on Medicaid impact warning
UHS•Universal Health Services shares fell 5% in extended trading after it warned Medicaid changes could materially affect future operating results. Third-quarter adjusted profit was $5.22 per share, above the $5.16 estimate, while revenue of $4.73 billion topped the $4.71 billion estimate.
1. Medicaid warning
Universal Health Services said new Medicaid eligibility requirements are expected to reduce enrollment and expenditures, lowering revenue and increasing uncompensated care at its facilities. The company warned the changes could materially affect future operating results.
2. Quarterly results
Third-quarter adjusted profit was $5.22 per share, compared with analysts’ estimate of $5.16, and revenue was $4.73 billion versus the $4.71 billion estimate.
3. Borrowing costs
The company said higher borrowing costs have increased interest expense and reduced free cash flow, and that further rate increases could hurt future results and cash flows. Shares fell 5% to $168.50 in extended trading.
