Behavioral Segment Concerns Overshadow Universal Health Q2 Earnings Beat

Universal Health Services Inc. (NYSE:UHS), one of the largest healthcare management companies in the U.S., reported second-quarter adjusted earnings of $5.35 per share on Monday.

The company, which oversees hundreds of behavioral health facilities, beat the consensus of $4.92.

The King of Prussia, Pennsylvania-based hospital operator reported sales of $4.28 billion, up 9.6% year over year, beating the consensus estimate of $4.24 billion.

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Acute care hospitals

During the second quarter of 2025, at acute care hospitals owned during both periods (on the same facility basis), adjusted admissions (adjusted for outpatient activity) increased by 2.0%, while adjusted patient days increased by 1.1% year over year.

Net revenue per adjusted admission increased by 3.8% while net revenue per adjusted patient day increased by 4.7%.

Net revenues generated from acute care services, on a same facility basis, increased by 7.9%.

Behavioral health care facilities

During the second quarter of 2025, at behavioral health care facilities on a same-facility basis, adjusted admissions increased by 0.4%, while adjusted patient days increased by 1.2%.

Net revenue per adjusted admission increased by 8.6% and net revenue per adjusted patient day increased by 7.8%.

Net revenues generated from behavioral health care services, on a same facility basis, increased by 8.9%.

Universal Health operates 29 inpatient acute care hospitals and 338 inpatient behavioral health facilities, plus 61 outpatient facilities.

Guidance

Universal Health Services raised fiscal year 2025 adjusted earnings from $18.45-$19.95 per share to $20.00-$21.00, compared to the consensus of $19.68.

The company narrowed 2025 sales guidance from $17.02 billion-$17.36 billion to $17.09 billion-$17.31 billion, versus the consensus of $17.14 billion.

UHS revised its 2025 forecasted adjusted EBITDA to approximately $2.46 billion—$2.543 billion, compared to the prior range of $2.36 billion—$2.48 billion.

Analyst Take

Guggenheim Partners said adjusted EBITDA-NCI of $643 million beat the consensus estimate of $615 million. However, the company's underlying "core" performance was weaker than expected after removing $101 million in DPP payments not included in the original guidance and a $25 million added headwind from DC hospitals. The shortfall was mainly due to underperformance in the Behavioral segment.

Analyst Jason Cassorla writes, “However, we believe higher 2025 EBITDA and subsequently FCF likely translates into higher share repurchase, all-else equal, and that leverage at 1.9x gives the company ample flexibility to continue augmenting returns.”

Analyst Cassorla expects the stock to trade unevenly following the results, despite a ~15% drop in the past two weeks (compared to a 2% gain in the S&P 500) and UHS trading at historically low valuation levels. Investors remain cautious about future growth in the behavioral health segment due to ongoing challenges in patient volumes.

Price Action: UHS stock is up 4.86% at $162.49 at the last check on Tuesday.

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