Universal Health Q1 Earnings Beat on Strong Acute Care Admissions

Universal Health Services, Inc. UHS reported first-quarter 2025 adjusted earnings per share (EPS) of $4.84, which beat the Zacks Consensus Estimate by 11%. The bottom line climbed 30.8% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Net revenues advanced 6.7% year over year to nearly $4.1 billion. However, the top line missed the consensus mark by 1.1%.

UHS’ better-than-expected quarterly earnings were aided by continued growth in admissions at its acute care facilities, resulting in substantial contributions from the segment. Higher same-facility-adjusted patient days also contributed positively to the outcomes. However, the upside was partly offset by higher expenses.

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 was $598.2 million, which improved nearly 13.8% year over year and surpassed our estimate of $559.3 million.

Total operating costs escalated 5.5% year over year to $3.6 billion due to higher salaries, wages and benefits, and other operating expenses.

UHS’ Segmental Update

Acute Care Hospital Services

Adjusted admissions (adjusted for outpatient activity) rose 2.4% on a same-facility basis. Adjusted patient days grew 0.3% year over year. Net revenues stemming from Universal Health’s acute care services advanced 6.5% on a same-facility basis.

Behavioral Health Care Services

Adjusted admissions decreased 1.6% on a same-facility basis in the quarter. Adjusted patient days declined 0.3% on a same-facility basis. Net revenues derived from UHS’ behavioral healthcare services increased 5.5% on a same-facility basis.

Financial Update of UHS (As of March 31, 2025)

Universal Health exited the first quarter with cash and cash equivalents of $126.8 million, which rose from the 2024-end level figure 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 $1.02 billion at the first-quarter end.

Total assets of $14.9 billion increased from $14.5 billion at 2024-end. 

Long-term debt amounted to $4.6 billion, which increased from $4.5 billion as of Dec. 31, 2024. Current maturities of long-term debt totaled $40.4 million.

Total equity of $6.9 billion rose from the 2024-end figure of $6.7 billion. 

UHS generated cash flows from operations of $360 million in the first quarter of 2025, which declined 9.2% from the year-ago period.

UHS’ Share Repurchase Update

Universal Health bought back shares worth $180.6 million in the first quarter. The company had a leftover repurchase capacity of around $643.7 million as of March 31, 2025.

2025 Guidance of Universal Health

Management earlier expected 2025 net revenues to be between $17.02 billion and $17.36 billion, the midpoint of which indicates an improvement of 8.6% from the 2024 figure.

Adjusted EBITDA, net of NCI, was estimated in the range of $2.36-$2.48 billion, the midpoint of which indicates 7.8% growth from the 2024 figure. EPS was earlier expected in the band of $18.45-$19.95, the midpoint of which implies a rise of 15.6% from the 2024 figure.

Depreciation and amortization expenses were earlier anticipated to be $639.6 million. Interest expenses were estimated at around $150.3 million. Capital expenditures were earlier expected to be between $850 million and $1 billion. Provision for income taxes was expected in the band of $376.81-$407.31 million.

UHS’ Zacks Rank & Other Key Picks

UHS currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader medical space are Aveanna Healthcare Holdings Inc. AVAH, ANI Pharmaceuticals Inc. ANIP and BeiGene, Ltd. ONC, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Aveanna Healthcare’s current-year earnings of 12 cents per share has witnessed one upward revision in the past month against none in the opposite direction. The consensus estimate for current-year revenues is pegged at $2.1 billion, implying 4.6% year-over-year growth.

The Zacks Consensus Estimate for ANI Pharmaceuticals’ current-year earnings is pegged at $6.36 per share. ANI Pharmaceuticals beat earnings estimates in each of the trailing four quarters, with the average surprise being 17.3%. The consensus estimate for current-year revenues is pegged at $769.2 million, implying 25.2% year-over-year growth.

The Zacks Consensus Estimate for BeiGene’s current-year earnings of $1.54 per share has witnessed one upward revision in the past week against no movement in the opposite direction. The consensus estimate for current-year revenues is pegged at $5.1 billion, calling for 34.6% year-over-year growth.

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