HCA Forecasts 2015 Earnings Less Than Analysts’ Estimates

HCA Holdings Inc., the biggest for-profit U.S. hospital chain by patient volume, forecast adjusted 2015 earnings that will fall short of what analysts had projected.

Earnings in 2015, excluding certain items, will be $4.55 to $4.95 a share, compared with the $5.15 average of 25 analyst estimates surveyed by Bloomberg. Revenue will be $38.5 billion to $39.5 billion, the Nashville, Tennessee-based company said in a statement Tuesday.

Increased executive stock compensation and smaller payments from the U.S. to implement new electronic health records will cut into 2015 earnings, Chief Financial Officer William Rutherford said on a call with investors. HCA also plans to spend $100 million on software improvements, according to Samuel Hazen, the company’s chief operating officer.

The company also announced a share buyback program of as much as $1 billion. HCA shares fell 1.8 percent to $68.91 at 11:41 a.m. in New York, after gaining 45 percent in the last year as of Monday’s close.

Hospitals are dealing with changes from the Patient Protection and Affordable Care Act, or Obamacare, which requires all Americans to have health insurance, reducing the number of non- or slow-paying customers health providers see. The law also asks some hospitals and doctors to be paid based on quality, to take on financial risk based on how well patients do, and to adopt electronic record keeping systems.

Republicans now in control of Congress want to repeal the law, and the U.S. Supreme Court will consider a case this year that could strip subsidies that help people buy coverage.

Fourth-quarter adjusted earnings were $1.33 a share, HCA said, beating analyst projections by 3 cents. Net income was $527 million, or $1.19 a share, compared with $424 million, or 92 cents a share, a year before.

HCA is the first of the major U.S. hospital companies to report fourth-quarter results, with Tenet Healthcare Corp. and Community Health Systems Inc. to follow.

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