Investing.com -- Shares in HCA Holdings plummeted nearly 10% in after-hours trading after the biggest for-profit hospital operator in the U.S. projected third quarter earnings slightly below analysts' expectations on Wednesday.
HCA Holdings, a Nashville-based health care operator, anticipates that it will earn revenues of $9.86 billion for the third quarter or earnings of 1.17 per share. Analysts expect HCA to report sales of $9.85 billion or per share earnings of 1.22. By comparison, HCA reported earnings of $9.220 billion last year in the third quarter of 2014.
In addition, HCA expects to realize third quarter income before taxes of approximately $921 million compared with $929 million last year in the same period. The company also expects to report net income of $1.17 per diluted share compared with $1.16 in last year's third quarter. HCA expects adjusted EBITDA for the quarter to be around $1.815 billion, slightly below a level of $1.828 billion in the third quarter of 2014.
The subdued forecasts were made following a considerable decline in HCA's operating margin, amid increased labor costs and a less favorable payer mix. For the period, labor costs increased as a percentage of revenue from 45.7 to 46.9%, due in part to lower productivity and a greater reliance on contracted labor to fill staffing needs.
Meanwhile, HCA said same facility admissions for the third quarter of 2015 increased by 2.9% for the quarter and same facility equivalent admissions rose by 3.6% on a year-over-year basis. Same facility emergency room also surged by 5.8% from the same quarter last year.
For the year as a whole, HCA now expects earnings of $5.20 to $5.25 per share. The guidance falls just short of analysts' forecasts for per-share earnings of $5.29.
Shares in HCA plummeted 7.02 or 9.23% to 69.00. HCA anticipates releasing its third quarter results around October 27.