Universal Health Realty Income Trust reported a net income of $3.5 million, or $0.25 per diluted share, for the second quarter of 2023, compared to $5.2 million, or $0.38 per diluted share, in the same period of 2022. The decrease was primarily due to higher interest expense and demolition costs related to a property in Chicago.
Net income decreased by $1.7 million, or $0.13 per diluted share, compared to Q2 2022.
Increased interest expense due to higher borrowing rates and outstanding borrowings negatively impacted net income by $1.8 million, or $0.13 per diluted share.
Demolition expenses in Chicago reduced net income by $862,000, or $0.06 per diluted share.
Funds from operations (FFO) decreased to $10.6 million, or $0.77 per diluted share, from $12.2 million, or $0.88 per diluted share, in Q2 2022.
The press release contains forward-looking statements based on current management expectations. Future operations and financial results of our tenants, and in turn ours, could be materially impacted by various developments including, but not limited to, decreases in staffing availability and related increases to wage expense experienced by our tenants resulting from the nationwide shortage of nurses and other clinical staff and support personnel, the impact of government and administrative regulation of the health care industry; declining patient volumes and unfavorable changes in payer mix caused by deteriorating macroeconomic conditions (including increases in uninsured and underinsured patients as the result of business closings and layoffs); potential disruptions related to supplies required for our tenants’ employees and patients; and potential increases to other expenditures. In addition, the increase in interest rates has substantially increased our borrowings costs and reduced our ability to access the capital markets on favorable terms. Additional increases in interest rates could have a significant unfavorable impact on our future results of operations and the resulting effect on the capital markets could adversely affect our ability to carry out our strategy.
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