Universal Health Services (0LJL.L) Q3 2024 Earnings Report

Universal Health Services (UHS) reported a solid Q3 2024, with revenue of $3.963B, up 11.23% year over year and a gross profit of $3.573B delivering a gross margin of 90.15%. EBITDA reached $534.9M and operating income was $384.2M, yielding an operating margin of 9.69% and a net margin of 6.53% on net income of $258.7M and EPS of $3.89. The quarter benefited from favorable top-line dynamics, while the company continued to monetize scale across its Acute Care Hospital Services and Behavioral Health Care Services segments.

On a QoQ basis, revenue grew modestly by 1.42% but operating income declined 11.97% QoQ and net income declined 10.53% QoQ, with a notable negative swing in total other income/expenses net (-$42.6M) and a tax expense of $75.6M driving the quarterly profitability mix. Despite this, cash generation remained strong: net cash provided by operating activities was $333.0M and free cash flow was $85.0M. The balance sheet remains robust, with total debt of about $5.11B and a low debt-to-capitalization reading (~1.65%), supported by a solid liquidity position (current ratio ~1.39, quick ratio ~1.28).

Looking ahead, management commentary (where available) typically emphasizes stabilized patient volumes, ongoing cost controls, and capital allocation to maximize returns. The company appears well-positioned to sustain cash generation given its scale and integrated platform, though it faces the usual hospital operator risks including labor cost pressures, payer mix dynamics, and regulatory changes.