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HCA Healthcare suspends dividend, buybacks as COVID-19 delays surgeries

By Manas Mishra and Vishwadha Chander

(Reuters) - Hospital operator HCA Healthcare Inc <HCA.N> on Tuesday pulled its 2020 forecast and suspended its dividend and share buyback program, as it prepares for a steep decline in patient visits and surgeries at its hospitals due to the COVID-19 pandemic.

The largest for-profit U.S. hospital operator, with about 186 hospitals predominantly in Florida and Texas, has been treating thousands of coronavirus patients and is a recipient of a part of the government's $100 billion (81.4 billion pounds) in aid.

But the crisis has halted lucrative elective procedures such as surgeries and kept many other patients at home as they wait out the crisis. Intensive respiratory treatments are less profitable for hospitals than elective procedures.

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Shares of the first big U.S. operator to report for the quarter ended March 31, fell 3.7%.

HCA, on a conference call, said it has seen a 70% drop in outpatient surgeries at its hospitals in April so far, from the prior year period, while inpatient admissions declined 30%.

HCA expects the impact to its business to be most pronounced during the current phase of the pandemic, after which it sees certain restrictions on procedures being lifted by the second half of the current quarter.

"The recovery period is really difficult to determine at this point. We don't know what the full effects and the damage to the economy are going to be," Chief Financial Officer William Rutherford said on a conference call.

The company had received a majority of $4 billion in accelerated Medicare payments under the Coronavirus Aid, Relief, and Economic Security Act, signed by President Donald Trump last month.

It had also received $700 million of funds distributed to hospitals from the Public Health and Social Services Emergency fund, HCA executives said on call.

Rival Tenet Healthcare Corp <THC.N> put about 10% of its workforce on furlough, Reuters reported last week.

"Impressively, HCA has not let go or furloughed any employees," said Mizuho analyst Ann Haynes.

In the first quarter, inpatient and outpatient surgeries declined 1.8% and 5.9% respectively, on a same-facility basis.

Net income attributable to HCA fell to $581 million from $1.04 billion, a year earlier.

Excluding items, the company earned $2.33 per share, missing analysts' estimates of $2.64 per share, according to IBES data from Refinitiv.

(Reporting by Manas Mishra and Vishwadha Chander in Bengaluru; Editing by Aditya Soni, Supriya Kurane and Shailesh Kuber)