HCA shares hit all-time high after health reform boosts results

Company lifts guidance on back of strong Q2; local hospital peers also up nicely

Shares of HCA Holdings hit an all-time high Wednesday, climbing more than 9 percent after the company previewed better-than-expected second-quarter profits.

The hospital giant's management team now expects revenues in the second quarter of $9.2 billion, compared to $8.4 billion the year prior. Net income is expected to be $1.07 per diluted share, up 17 percent from Q2 '13. The company also lifted its full-year 2014 profit guidance by about 15 percent, to a range of $4.00 to $4.25 per share from $3.45 to $3.75.

A big part of the higher guidance comes from the implementation of health care reform. Previously, HCA execs thought reform would add between 1 percent and 2 percent to the company's adjusted EBITDA. Now, that benefit is expected to be 2 percent to 3 percent — an increase of almost $70 million in adjusted EBITDA.

"Results for the second quarter of 2014 exceeded our internal expectations, both in terms of our core operations and health reform," Milton Johnson, HCA's president and CEO, said in a release. "As a result, we are raising our earning guidance for the full year 2014."

At about 1 p.m. Wednesday, shares of HCA (Ticker: HCA) were changing hands at $60.54 after closing at $55.21 Tuesday. Year to date, they're up almost 30 percent. HCA's news also has given a big boost to shares of local peers Community Health Systems and LifePoint Hospitals, which are up 8.6 and 6.7 percent, respectively, in early-afternoon trading.

Johnson and his team plan to release their complete financial results on July 29.