February 27, 2023 06:07 PM
Universal Health Services’ profits dropped approximately 27% in the fourth quarter and the system said workforce shortages remain one of its biggest challenges.
The King of Prussia, Pennsylvania-based for-profit system on Monday reported net income of $174.82 million in the fourth quarter, compared with $239.12 million a year ago. Revenue grew 5.2% to $3.45 billion.
Operating expenses jumped 7.6% to $3.19 billion, due in part to increased costs for salaries and wages, supplies and changes to asset values, including a write-down on Desert Springs Hospital Medical Center in Las Vegas, which will discontinue impatient care in March.
A shortage of workers remains one of the biggest challenges, creating a “material unfavorable impact” driven by high labor costs and a need for contract labor, the system said in a news release. It said its behavioral healthcare facilities in particular have been unable to fill job openings and, as a result, been forced to limit patient volumes.
Universal Health Services operates 28 acute-care hospitals, 331 inpatient behavioral-health facilities and 39 outpatient facilities and ambulatory care locations across 39 states, plus Washington, D.C., Puerto Rico and the United Kingdom.
For the full year, Universal reported $675.61 million in net income, compared with $991.59 million in 2021. Revenue increased 6% to $13.4 billion, and operating expenses rose 9.9% to $12.4 billion.
In February 2022, the system’s board approved the repurchase of as much as $1.4 billion of the system’s shares. At year’s end, $947 million of that pool remained available.
Shares for Universal Health Services closed at $146.08 each on Monday, a 2.4% increase year-to-date.
Executives will discuss financial results on an investor call Tuesday.