Universal Health's Q4 Earnings Miss on Softer Volumes & Rising Costs

Universal Health Services, Inc. UHS reported fourth-quarter 2025 adjusted earnings per share (EPS) of $5.88, which missed the Zacks Consensus Estimate by 0.6%. The bottom line soared 19.5% year over year.

Net revenues of $4.49 billion improved 9.1% year over year. The top line beat the consensus mark by a whisker.

The quarterly results suffered from lower-than-expected admissions, adjusted patient days and elevated operating costs. The negatives were partially offset by higher net revenue per adjusted admissions.

Universal Health Services, Inc. Price, Consensus and EPS Surprise

Universal Health Services, Inc. price-consensus-eps-surprise-chart | Universal Health Services, Inc. Quote

UHS’ Quarterly Operational Update

Adjusted EBITDA, net of NCI, rose 10.4% year over year to $678.7 million, but came lower than our estimate of $681 million. 

Total operating costs came in at $3.97 billion, which escalated 9% year over year in the quarter under review due to higher salaries, wages and benefits, supplies and other operating expenses. The metric came higher than our estimate of $3.93 billion.

UHS’ Segmental Update

Acute Care Hospital Services

Adjusted admissions (adjusted for outpatient activity) remained flat on a same-facility basis in the fourth quarter, which missed our model estimate of 1.4% growth. Adjusted patient days declined 0.7% year over year, while net revenue per adjusted admission advanced 5.4%. Net revenues stemming from Universal Health’s acute care services improved 6.9% on a same-facility basis.

Behavioral Health Care Services

Adjusted admissions inched up 1.8% on a same-facility basis, which was lower than estimated. Adjusted patient days rose 1.5%, while net revenue per adjusted patient days advanced 5.6%. Net revenues derived from UHS’ behavioral healthcare services improved 7.2% on a same-facility basis.

Financial Update of UHS (As of Dec. 31, 2025)

Universal Health exited the fourth quarter with cash and cash equivalents of $137.8 million, which rose from the 2024-end level of $126 million. As part of its $1.3 billion revolving credit facility, net of outstanding borrowings and letters of credit, there remains an aggregate available borrowing capacity of $889 million at the fourth-quarter end. Total assets of $15.53 billion increased from the $14.47 billion figure at 2024-end. 

Long-term debt amounted to $4 billion, which declined from $4.46 billion at 2024-end. Current maturities of long-term debt totaled $748.2 million.

Total equity of $7.34 billion advanced from the 2024-end figure of $6.75 billion.

UHS generated cash flows from operations of $1.86 billion for 2025, which slipped from the prior-year comparable period’s $2.07 billion.

UHS’ Share Repurchase Update

Universal Health bought back shares worth around $333.5 million in the fourth quarter and $899.3 million in 2025. The total remaining authorization available under the buyback program now stands at $1.4 billion.

2026 Guidance

Management currently forecasts net revenues within $18.417-$18.789 billion. The mid-point of the guidance implies 7.1% growth from the 2025 figure of $17.365 billion. 

Adjusted EBITDA, net of NCI, is anticipated to be in the range of $2.641-$2.789 billion in 2026, indicating a 4.8% growth from the 2025 level of $2.59 billion. EPS is presently expected in the band of $22.64-$24.52, the mid-point of which suggests 8.5% growth from the 2025 figure of $21.74.

Capital expenditures are expected to be between $950 million and $1.1 billion.

Universal Health currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Other Medical Companies Perform?

Companies belonging to the broader Medical space, like HCA Healthcare, Inc. HCA, The Ensign Group, Inc. ENSG and Encompass Health Corporation EHC, have also reported results for the December quarter. Here’s how they have performed:

HCA Healthcare reported fourth-quarter 2025 adjusted EPS of $8.01, which outpaced the Zacks Consensus Estimate by 8.8% on the back of strong admissions. Modest gains in emergency room visits and a rise in revenue per equivalent admission also supported performance. However, the upside was partly offset by HCA Healthcare’s elevated operating expenses.

Ensign reported a fourth-quarter 2025 adjusted EPS of $1.82, which beat the Zacks Consensus Estimate by 4%, supported by improved occupancy rates, higher patient days and higher skilled service performance. The positives were partly offset by Ensign’s higher expenses.

Encompass Health reported fourth-quarter 2025 adjusted EPS of $1.46, which beat the Zacks Consensus Estimate by 13.2%, driven by higher net revenue per discharge and increased discharges, with growth coming from both inpatient and other revenues. At the same time, rising operating expenses partially offset these positives.

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