UPDATE 2-HCA says 2nd-qtr admissions rise; hospital shares up
(Adds analyst comment, details on results, background, updates stock price)
July 16 (Reuters) - HCA Holdings Inc, the largest U.S. for-profit hospital operator, said on Tuesday that second-quarter patient admissions rose more than 1 percent, boosting revenue and profit and pushing up shares in the sector.
The admissions increase, while small, came after a slow first quarter as HCA and other hospital chains struggled with low admissions because people used medical services less often.
HCA shares jumped 5.1 percent at $39.11, while other hospital operators, including Community Health Systems and Tenet Healthcare, also gained.
"That lift may not be deserved as we suspect that the volume rebound may be HCA market specific," CRT Capital analyst Sheryl Skolnick wrote in a research note.
Investor expectations for hospital companies have been low heading into the second-quarter earnings reporting season.
Tenet said in June that weak patient admissions in the first quarter had continued into the second quarter, pushing its outlook for adjusted cash flow for the period to the lower end of its previously forecast range.
Hospital companies' shares have rallied this year despite weak demand for services because investors expect earnings to strengthen in 2014 as more Americans gain insurance coverage under President Barack Obama's healthcare reform.
HCA stock had lagged the rest of the sector due to concerns it might warn of weakening demand in the second quarter, analysts said.
"With volume concerns gone, investor focus can now shift to the more important point of healthcare reform," Jefferies analyst Brian Tanquilut said in a note to clients.
HCA said same-facility admissions rose 1.3 percent in the second quarter. In the first quarter, admissions were up only 0.1 percent.
HCA preannounced second-quarter earnings of about 91 cents per share, up from 85 cents a year earlier, and higher than the average analyst estimate of 78 cents.
Revenue rose to $8.45 billion from $8.11 billion a year earlier.
Oppenheimer analyst Michael Wiederhorn called HCA's revenue growth respectable but said the admissions results were positive but were still below last year's levels. Stronger pricing boosted revenue in the quarter, he said.
HCA also preannounced net income before taxes rose to $806 million from $699 million, and earnings before interest, taxes, depreciation and amortization increased to about $1.69 billion from $1.57 billion. The figure excludes special items such as losses or gains from the sales of facilities.
The company also backed its outlook for 2013 earnings. It will report full quarterly results around Aug. 1.
Shares of Community Health were up 2.6 percent at $48.65, and Tenet rose 4 percent to $45.44.
(Reporting by Caroline Humer in New York and Susan Kelly in Chicago; Editing by Gerald E. McCormick, Lisa Von Ahn and Jeffrey Benkoe)