Universal Health Profits Continue to Fall

Hospital operator Universal Health Services Inc. (NYSE: UHS) said Monday that profits fell in the third quarter, as revenues grew on increased patient admissions and days stayed. Universal also reported a sharp rise in charity care and uninsured discounts.

Universal, which is based in King of Prussia, Pa., said net income dropped 75 percent to $28.9 million or 54 cents per share for the three month period ended Sept. 30, 2007. That compares to $113.9 million or $2 per share a year earlier, when the company booked a $130.3 million gain from hurricane-related insurance coverage. Excluding insurance recoveries and other items, the company said adjusted income was $34.1 million, or 64 cents per share, up from $30.6 million, or 54 cents per share, in the year-earlier period.

Universal said revenue rose 13 percent to $1.18 billion during the third quarter from $1.04 billion a year earlier. Inpatient admissions increased 2.5 percent and patient days rose 2.9 percent.  

Because it does not pursue collection of sales that qualify as charity care, Universal said the amount is not included in its revenue. However, Universal said it provided $149 million in charity care and discounts, based on established rates, during the third quarter, compared to $99 million in charity care and discounts during the third quarter of 2006. 

Net income for the nine months ended September 30, 2007 was $130.4 million, or $2.43 per diluted share, down about 42 percent compared with $225.3 million, or $3.89 per diluted share, during the year ago period.  And net revenues increased 14 percent to $3.56 billion during the first nine months of 2007 as compared to $3.13 billion during the comparable nine-month period of 2006.

Universal Health operates acute care hospitals, behavioral health centers, and other health service operations nationwide.