HCA Healthcare shares (NYSE:) fell nearly 15% after it reduced its revenue and EPS forecasts for FY 2018.

In line with last year’s period, the healthcare provider posted an adjusted EPS of 4.14. The adjusted EPS was $4.14, which is lower than the $4.14 reported in the previous quarter. Analyst expectations were for $4.25 per share.

HCA reported revenue of $14.95Billion in its first quarter, up 6.9% YoY. It beat consensus estimates of $14.76Billion.

The company expects FY EPS to be in the $16.40-$17.60 range, which is lower than the $18.40- $19.20 outlook and less than the $18.82 consensus estimate.

The revenue is anticipated to be between $59.50 and $61.50 Billion, down from $60.00 to $62.00B in the prior guidance and lower than analyst consensus of $61.16 trillion.

HCA anticipates FY adjusted EBITDA between $11.8 billion and $12.4 billion. This is in contrast to its previous outlook, which was 12.55 billion to $12.05 billion. It also falls below the anticipated $12.82 billion.

This healthcare company has announced quarterly dividends in the amount of $0.56 per Share, which will be paid by June 30.

BMO analyst Matt Borsch commented:

“We expect investors will be surprised by this earnings miss (if modest) even though the apparent causal factor (wage inflation) was known to be in play. In the HCA press release, management pointed to “positive volume/revenue indicators” that were more than offset by ‘inflationary pressures on labor costs’,” he said in a note.

Gary Taylor, Cowen Analyst was also shocked by this guidance cut.

“While we previewed a 1Q22 EBITDA miss, we did not anticipate the company would lower 2022 EBITDA guidance by 5-7% (depending on your treatment of 2021 TX MDCD funds). HCA, Ex-TX MDCD: HCA slightly exceeded our SS revenue estimate while missing our labor cost estimate of 110 bp. We expect the historically-rich 9.5x forward EBITDA multiple to reset by 0.5-1.0x until greater 2023 visibility is developed,” Taylor commented.

By Senad Karaahmetovic