Universal Health Services, Inc. (NYSE:UHS) Q1 2024 Earnings Call Transcript April 25, 2024
Universal Health Services, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day and thank you for standing by. Welcome to the Universal Health Services First Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Steve Filton, Executive Vice President and Chief Financial Officer. Please go ahead.
Steve Filton: Thank you and good morning. Marc Miller is also joining us this morning. We welcome you to this review of Universal Health Services results for the first quarter ended March 31st, 2024. During the conference call, we will be using words such as believes, expects, anticipates, estimates; and similar words that represent forecasts, projections, and forward-looking statements. For anyone not familiar with the risks and uncertainties inherent in these forward-looking statements, I recommend a careful reading of the section on risk factors and forward-looking statements and risk factors in our Form 10-K for the year ended December 31, 2023. We’d like to highlight just a couple of developments and business trends before opening the call up to questions.
As discussed in our press release last night, the company reported net income attributable to UHS per diluted share of $3.81 for the first quarter of 2024. After adjusting for the impact of the item reflected on the supplemental schedule as included with the press release, our adjusted net income attributable to UHS per diluted share was $3.70 for the quarter ended March 31, 2024. Our Acute Hospitals continue to experience strong demand for their services in the first quarter with adjusted admissions increasing 4.5% year-over-year on a same-facility basis. When combined with the net revenue per adjusted admission increase of 4.6%, our Acute Care Services net revenues increased by 9.6% during the first quarter of 2024 as compared to the first quarter of 2023.
Despite these increases, we believe that both volumes and acuity in March were adversely impacted by the timing of Easter and Spring Break, which occurred in March of this year compared to April of last year. In connection with a previously disclosed newly implemented Medicaid Supplemental Reimbursement program in Nevada, our Acute Care Hospitals located in the state recorded approximately $38 million of aggregate incremental income during the first quarter of 2024. Meanwhile, premium pay in the quarter was $68 million as compared to $86 million in the first quarter of 2023. During the first quarter of 2024, same-facility net revenues in our Behavioral Health Hospitals increased by 10.4%, driven primarily by an 8.2% increase in revenue per adjusted day.
Adjusted patient day growth in the quarter was 2.0% over the prior year quarter. We believe the patient day volume was muted somewhat by the aforementioned calendar timing issues. Our cash generated from operating activities increased by $106 million to $396 million during the first quarter of 2024 as compared to $291 million during the same quarter in 2023. In the first quarter of 2024, we spent $209 million on capital expenditures and acquired 700,000 of our own shares at a cost of approximately $125 million. Since January 1, 2019, we have repurchased almost 27 million shares, representing 30% of our shares outstanding as of that date. As of March 31, 2024, we have $733 million of aggregate available borrowing capacity pursuant to our $1.2 billion revolving credit facility.
I will now turn the call over to Marc Miller, President and CEO for closing comments.
Marc Miller: Thanks Steve. In our yearend conference call, we said we envisioned 2024 as a year of continued strength in both of our business segments. And during the first quarter of 2024, both segments increased their operating margins when compared to the comparable quarter of 2023. We anticipated that Acute Care volumes would likely moderate to a degree or remain robust compared to historical levels. We also believe Acuity trends will continue their recovery trajectory. In our Behavioral segment, we anticipated the patient day volumes would gradually improve over the course of the year, returning to a more historically normal level of growth in the 3% range. We noted that both of our business segments have experienced a significant increase in Medicaid supplemental payments, which are helping to compensate for several years of inadequate reimbursement levels that has failed to keep up with the costs we had to incur to properly care for our patients.
Overall, we’re pleased with the first quarter results. We are now happy to answer questions at this time.
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