HCA will still invest in hurricane-prone Georgia, North Carolina

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Source: Modern Healthcare
Author: Haley Desilva
Date: October 25, 2024

HCA Healthcare plans to continue investing in hurricane-prone areas despite the hundreds of millions of dollars in damage sustained at its facilities due to Hurricanes Helene and Milton.

"If you would have asked me what two communities were most impacted, I would have never said in 100 years Augusta, Georgia, and Asheville, North Carolina," said Sam Hazen, HCA CEO, during a third-quarter earnings call Friday with financial analysts. "We dealt with an unprecedented storm...I think we're going to be stronger as a result of it in those markets. We believe that our portfolio of communities that we serve are very well-positioned for long-term growth."

Hazen said in the past, several of its facilities recovered quickly and performed better following a hurricane.

"We understand the risk associated with hurricane and such," Hazen told analysts. "That's why we built the capabilities that we've got, and we think we're diversified enough across those communities to deal with that particular risk."

Nashville, Tennessee-based HCA estimated Helene caused $50 million in damage and Milton caused between $200 million to $300 million in damage to its facilities, numbers that do not include potential insurance claim payments. It expects revenue will be negatively impacted in the fourth quarter and in 2025, mainly due to damages to North Carolina facilities, although it said the impact will be manageable.

The health system said Hurricane Helene affected 29 hospitals and that it plans to spend $13 million alone on water supply costs for Mission Hospital in Asheville, North Carolina, and other facilities through October. Hurricane Milton affected 34 hospitals, including HCA's 455-bed Florida Largo Hospital, which is under repair.

The health system maintained its 2024 full-year guidance range of between $69.8 billion and $71.8 billion in revenue. Guidance for full-year net income earnings remains at $5.68 billion to $5.98 billion.

However, Michael Marks, chief financial officer and executive vice president, said during the call the system anticipates being on the lower end of its guidance.

Despite hits to revenue due to the disasters, HCA’s revenues totaled nearly $17.49 billion this quarter, compared with $16.2 billion in the third quarter of 2023, according to its third quarter earnings report. Quarterly net income totaled $1.27 billion, or 4.88 per share, compared with $1.08 billion, or $3.91 per share in the year-ago period.

Shares of HCA closed down almost 9% Friday.