HCA indicated that revenues for the period would total approximately $8,440 million or 1.1% below our $8,532 million estimate and more than 3% below the consensus $8,710 million forecast.
When the FY13 guidance of $33.5 billion to $34.5 billion was provided in early February, we indicated that the company figures were acceptable and that the consensus numbers were overstated. Our original revenue forecast of $33.7 billion, was at the low-end of the company guided range when consensus figures stood at $37.2 billion and the Q1 estimate was $9,290 million.
As we indicated at that time and shared with the Cohen team, the slowing impact of the influenza outbreak throughout Q1, coupled with the company's narrow geographic focus (with high uninsured populations) and continued expansion of unpaid accounts (to 11% of total revenues), likely served as the primary variances between our projection and the consensus models.
We had modeled a modest 2-4% revenue growth figure throughout the fiscal year as the company faced challenging comparables and will experience margin compression in fiscal Q1. Our EBITDA margin projection is for fiscal Q1 to fall to 17.6% down from 19.3% in fiscal 1Q12 with the figure increasingly exceeding prior year performance starting in fiscal Q2.
In reviewing specific expense items, we had forecast that:
- Salaries and benefits would total 40.2% of reported revenues or $3,850 million, down from 40.6% in the prior year's quarter.
- Supplies would total $1,400 million or 14.6% of revenues, down from 15.4% in fiscal 1Q12.
- Other operating expenses, which includes contract services, professional fees, repairs and maintenance, rents and
leases, utilities, insurance and non-income taxes would total $1,600 million or 16.7% of revenues that represents an increase over the 16.2% reported in fiscal 1Q12.
Overall, we have projected earnings of $1.12 on a diluted per share basis down from $1.18 in fiscal Q1 2012 and for earnings to total $3.98 for fiscal 2013 up from $3.76.
If you would like to discuss any modeling assumption please feel free to send me a direct message, as opposed to posting a comment, and I will be glad to review.