Columbia/Hca Hit Hard By Revenues, Write-Offs

Columbia/ HCA Healthcare Corp. lost $1.29 billion during the fourth quarter as the hospital giant continued a restructuring prompted by a massive federal investigation into its billing practices.

Columbia’s revenues dropped 9 percent and the company took $843 million in write-offs during the quarter. The loss remained within analysts’ latest expectations, which were revised when the company last week said its loss could reach $1.35 billion, prompting a stock sell-off.

The quarterly loss of $2.01 per share on a diluted basis compares with profit of $414 million, or 61 cents a share, in the comparable 1996 quarter.

Revenues from continuing operations for the quarter ended Dec. 31 totaled $4.4 billion, compared with $4.8 billion a year earlier.

“I think they went out of their way to make it as bad as it could be,” said Kenneth Abramowitz, an analyst at Sanford Bernstein. “They wrote off everything they could find.”

Abramowitz said the company may be hoping that its finances looked so bad at the end of 1997, anything in the future will seem rosy by comparison.

Most write-offs - $732 million - were on hospitals and other facilities Columbia hopes to sell. The company also spent $55 million on an internal investigation and severance packages, and $56 million to change accounting practices.

The loss for all of 1997 was $305 million, or 46 cents a share, compared with earnings of $1.5 billion, or $2.22 per share, in 1996.

Three Columbia middle managers have been indicted in Florida, and the company itself is a target of the investigation into allegations it overbilled Medicare, Medicaid and other government health programs.

Under a restructuring announced by Dr. Thomas Frist Jr., Columbia’s chairman and chief executive officer, the company plans to jettison its Value Health home health care business, some surgery centers and about a third of its 336 hospitals.

Sheryl Skolnick of BancAmerica Robertson Stephens is concerned because the number of days patients were in Columbia hospitals declined, as did the revenue per patient. Also, the number of Medicare patients dropped, while managed care patients - with their stingier and less timely reimbursements - increased.

“The real story here is where’s the cash flow? If the company has cash flow, it can survive,” she said.

Some stocks that moved substantially or traded heavily Friday:

NYSE

Hambrecht & Quist, down 2-1/2 at 32-1/8.

The Wall Street Journal reported that Merrill Lynch canceled a proposed takeover of the investment bank because of concerns about regulatory inquiries into how the San Francisco-based company allocates shares in hot initial public offerings.

Office Depot, up 1-3/8 at 26-1/4.

The office-supply retailer late Thursday reported a fourth-quarter profit of $46.7 million, or 28 cents a share on a diluted basis, topping analysts’ expectations by about 2 cents a share.

Columbia/HCA Healthcare, up 5/8 at 26-11/16.

The nation’s largest hospital chain announced a fourth-quarter loss of $1.29 billion, mostly because of one-time write-offs on hospitals and other facilities it hopes to sell. The Nashville, Tenn.-based company’s warned of the loss last week, sending its stock to its lowest level in three years.

NASDAQ

Versatility, down 2-7/16 at 3-3/16.

The maker of software used to automate telemarketing said it expects to report a heavy loss for its quarter ended Jan. 31. The Fairfax, Va.-based company blamed falling revenues and higher costs.

Logility, down 4 at 9.

The Atlanta-based maker of business software expects to report third-quarter earnings of 2 cents to 4 cents a share for the quarter ended Jan. 31, falling short of the 5 cents a share predicted by analysts.