Universal Health Realty Stock Gains Post Q4 Earnings, Revenue Slips

Shares of Universal Health Realty Income Trust UHT have gained 0.1% since the company reported its earnings for the quarter ended Dec. 31, 2025, against the S&P 500 Index’s 0.1% decline over the same time frame. Over the past month, however, the stock has outperformed the broader market, rising 8.2% against the S&P 500’s 1.2% decline.

Universal Health Realty’s Earnings Snapshot

For the fourth quarter of 2025 ended Dec. 31, 2025, net income declined 7.2% to $4.3 million, or $0.31 per diluted share, from $4.7 million, or $0.34 per diluted share, in the year-ago quarter. The decrease in quarterly net income reflected lower aggregate income at certain properties, partially offset by reduced interest expense due primarily to a lower average effective borrowing rate. Total revenues for the quarter edged down 0.7% to $24.5 million from $24.6 million a year earlier, driven by softer lease revenue from non-related parties and the impact of a vacated medical office building in Amarillo, TX.

For the full year, net income fell 8.4% to $17.6 million, or $1.27 per diluted share, from $19.2 million, or $1.39 per diluted share, in 2024. The decline was attributed to lower property-level income, including approximately $900,000 of nonrecurring depreciation recorded in the third quarter of 2025, as well as the absence of a prior-year property tax reduction. Annual revenues increased 0.2% to $99.2 million from $99 million, supported by higher other revenue from non-related parties and steady lease income from Universal Health Services (“UHS”) facilities.

Funds from operations (FFO), a key REIT metric, were essentially flat. Fourth-quarter 2025 FFO totaled $11.7 million, or $0.85 per diluted share, compared with $11.8 million, or $0.85 per share, in the prior-year period. For the year, FFO declined 0.4% to $47.7 million, or $3.44 per diluted share, from $47.9 million, or $3.46 per share.

UHT’s Other Key Business Metrics

Depreciation and amortization expense rose in both the quarter and full year. Quarterly depreciation increased 4.7% year over year to $7.1 million from $6.8 million, while full-year depreciation climbed 5.2% to $28.9 million from $27.4 million. Advisory fees to UHS also rose 2.7% and 2.1%, respectively, in the quarter and full year. Interest expense declined 5.5% to $4.6 million in fourth-quarter 2025 from $4.9 million in the prior-year quarter, reflecting the benefit of interest rate swap agreements and a lower effective borrowing rate.

On the balance sheet, net real estate investments declined to $410 million as of Dec. 31, 2025, from $425.9 million a year earlier. Total assets decreased to $564.9 million from $580.9 million during the same period. Line of credit borrowings increased to $356.2 million from $348.9 million, reducing available capacity under the $425 million credit agreement to $68.8 million at year-end.

UHT declared a fourth-quarter 2025 dividend of $0.745 per share, totaling $10.3 million, up from $0.735 per share in the prior-year quarter.

Universal Health Realty Income Trust Price, Consensus and EPS Surprise

Universal Health Realty Income Trust price-consensus-eps-surprise-chart | Universal Health Realty Income Trust Quote

Factors Influencing Universal Health Realty’s Results

Management attributed the quarterly earnings decline primarily to lower income from certain properties, most notably a medical office building in Amarillo, TX, vacated following lease expirations in the fourth quarter of 2025. The impact was partially offset by lower interest expense resulting from decreases in the average effective borrowing rate.

For the year, nonrecurring depreciation expense recorded in the third quarter and the absence of a 2024 property tax reduction in Chicago weighed on comparisons.

UHT’s Other Developments

In October 2025, Universal Health Realty entered into a ground lease to develop Palm Beach Gardens Medical Plaza I, an 80,000-square-foot medical office building in Florida. Construction began in February 2026 and is expected to be completed in the fourth quarter of 2026. The project is estimated to cost approximately $34 million, and a wholly owned UHS subsidiary has executed a 10-year master flex lease for about 75% of the rentable space, subject to reductions as third-party leases are signed.

During the quarter, no acquisitions or divestitures were announced.

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