HCA (NYSE: HCA) net income slips 3.9% but outlook moves to upper half of range

What happened

HCA Healthcare, Inc. (NYSE: HCA) said third-quarter net income fell 3.9% to $1.58 billion but expects 2026 results in the upper half of guidance.

Uninsured volume rose, mainly from patients who lost coverage on the health insurance exchanges. The company estimates that payer mix shift cost it approximately $400 million in third-quarter pretax income.

Revenues rose 3.6% to $19.85 billion from $19.16 billion a year earlier, a $688 million gain by OptimistFi's calculation. The guidance ranges were issued July 14.

Adjusted EBITDA, a non-GAAP measure, rose 1.2% to $3.92 billion from $3.87 billion. Revenue grew faster than the profit measure management uses to assess its hospitals.

Diluted earnings per share rose 4.5% to $7.27 from $6.96 even though net income fell. The diluted share count was 217.212 million against 236.181 million a year earlier. Results include $13 million in gains on sales of facilities, worth $0.05 per share. Without those gains, adjusted earnings per share was $7.22, up 3.7%.

Key numbers

Metric	Latest	Change	Source
Third-quarter revenues	$19.85 billion	from $19.16 billion, +3.6%	SEC 8-K Exhibit 99.1
Net income attributable to HCA	$1.58 billion	from $1.64 billion, -3.9%	SEC 8-K Exhibit 99.1
Diluted earnings per share	$7.27	from $6.96, +4.5%	SEC 8-K Exhibit 99.1
Adjusted EBITDA	$3.92 billion	from $3.87 billion, +1.2%	SEC 8-K Exhibit 99.1
Adjusted EBITDA margin	19.7%	from 20.2%, -0.5 percentage points	Calculated from SEC 8-K Exhibit 99.1
Total debt at Sept. 30	$50.49 billion		SEC 8-K Exhibit 99.1

Read more: HCA Healthcare (HCA) company research

Where the quarter slipped

Costs explain why profit lagged sales. Other operating expenses rose to $4.55 billion from $4.16 billion, up 9.3% by OptimistFi's calculation. They took 23.0% of revenue against 21.8% a year earlier.

Salaries and benefits, the largest cost line, eased to 43.2% of revenue from 43.6%. Even so, Adjusted EBITDA margin slid to 19.7% from 20.2%. Income before income taxes was $2.37 billion against $2.42 billion.

Management pointed to improvement in key areas. Growth accelerated in same facility equivalent admissions and in insured revenue per equivalent admission, excluding Medicaid Supplemental Payment Programs. Cost results improved, and the net benefit from those programs modestly increased.

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Volumes and pricing

Patient volume grew across the network. Same facility admissions rose 2.7% and equivalent admissions rose 3.0%. Emergency room visits rose 5.1%.

Surgeries went the other way. Same facility inpatient surgeries fell 1.4% and outpatient surgeries fell 3.7%. Same facility revenue per equivalent admission rose only 0.6%, so volume did most of the work on revenue.

HCA operated 189 hospitals at Sept. 30, two fewer than the 191 a year earlier.

Cash, debt and payouts

HCA repurchased 7.230 million shares for $2.97 billion in the quarter. It had $4.24 billion left under its authorization at Sept. 30. Operating cash flow was $4.46 billion against $4.42 billion a year earlier. Capital expenditures excluding acquisitions were $1.36 billion.

Cash was $908 million against total debt of $50.49 billion, with $2.23 billion available under the credit facility. Short-term borrowings and debt due within one year were $8.09 billion, up from $4.89 billion at Dec. 31.

The stockholders' deficit attributable to HCA widened to $8.08 billion from $6.03 billion at Dec. 31. Over nine months, operating cash flow was $8.81 billion against $10.28 billion a year earlier. Net income tax payments were $1.42 billion, up from $227 million.

The board declared a quarterly dividend of $0.78 per share, payable Dec. 29 to holders of record on Dec. 15.

Why it matters

OptimistFi has argued that HCA works if its local acute-care density leaves payors, physicians and patients few practical substitutes, and if management controls labor, reimbursement and leverage risk. The quarter supports the first part and tests the rest, so the direction is mixed.

Admissions and emergency room growth fit the density argument. Labor costs slipping as a share of revenue fit the cost-control argument. But the uninsured shift hits reimbursement directly, margin narrowed, and net income fell even with the facility-sale gains included.

Per-share growth came with a smaller share count, so net income is the cleaner read on the quarter. With debt due within a year rising, leverage is the risk to track.

What's next

HCA's fourth-quarter 2026 results, in its next earnings release, will test the upper-half claim. The ranges are revenue of $77 billion to $79.5 billion, net income attributable to HCA of $6.3 billion to $6.7 billion, Adjusted EBITDA of $15.4 billion to $16.1 billion and diluted earnings per share of $28.70 to $30.50.

The ranges assume a mostly stable operating environment. They exclude items such as gains or losses on facility sales and future approvals of state Medicaid directed and supplemental payments. A fourth quarter with a smaller payer-mix drag and continued volume growth would strengthen the case. A larger drag would weaken it.

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