HCA Holdings Inc.'s fourth-quarter earnings plunged compared to the final quarter of 2011, when the hospital operator booked a big acquisition gain, but results from the most recent quarter topped analyst expectations.
The Nashville, Tenn., company also said Tuesday that $175 million in pretax legal costs affected its performance in the final quarter of 2012. The costs stem from a Missouri case in which a judge ordered HCA to pay a charitable foundation for failing to spend enough money on capital improvements at Kansas City area nonprofit hospitals it acquired.
HCA is appealing the ruling but recorded a charge in the quarter for that case.
Overall, HCA earned $314 million, or 68 cents per share, in the three months that ended Dec. 31. That compares to net income of $1.94 billion, or $4.25 per share, in the final quarter of 2011.
Not counting the legal charge and a facilities sale gain, HCA recorded adjusted earnings of 91 cents per share.
Revenue climbed 13 percent to $9.54 billion, or $8.43 billion when accounting for funds the hospital chain set aside for patients who are unlikely to pay their bills.
Analysts expected, on average, earnings of 82 cents per share on $8.25 billion in revenue, according to FactSet.
HCA operates about 163 hospitals and 110 free-standing surgery centers in 20 states and England. Some analysts consider it a bellwether for the hospital sector.
Results from the final quarter of 2011 included a pretax gain of $1.52 billion from the acquisition of a controlling interest in an equity investment.
The company said an increase in patient use helped revenue climb in the 2012 quarter. Admissions at locations open at least a year rose 4.3 percent during the quarter, while emergency room visits jumped 12.7 percent.
For the full year, HCA earned $1.61 billion, or $3.49 per share, on $33 billion in revenue.
For 2013, the company expects adjusted earnings to range between $3 and $3.30 per share on revenue of $33.5 billion to $34.5 billion.
Analysts expect, on average, earnings of $3.48 per share on $34.02 billion in revenue.
Shares of HCA rose 9 cents to $37.70 in midday trading, while broader trading indexes climbed less than 1 percent. The hospital chain's stock price jumped 37 percent last year, to close 2012 at $30.17, and shares have already climbed nearly 25 percent so far in 2013.
Analysts expect investor interest in hospital stocks to pick up this year because the sector stands to benefit from upcoming health care overhaul coverage expansions. Starting next year, the overhaul will expand the state and federally funded Medicaid program for the poor and disabled people in some states, and it will begin offering income-based subsidies that help people buy coverage.
That's expected to reduce the number of uninsured patients treated by hospitals.