• Net Income: Q4 net income decreased to $3.6 million from $5.6 million in Q4 2022, and full-year net income dropped to $15.4 million from $21.1 million in 2022.

• Adjusted Net Income: Adjusted for a loss on divestiture, Q4 adjusted net income was $3.8 million, down from $5.6 million in the prior year's quarter.

• Funds from Operations (FFO): Q4 FFO fell to $11.4 million from $12.4 million in Q4 2022, and full-year FFO decreased to $44.6 million from $48.8 million in 2022.

• Dividends: The Q4 dividend was $.725 per share, with a total payout of $10.0 million.

• Property Transactions: Sold a vacant specialty facility in Corpus Christi, Texas, for $3.9 million, and acquired McAllen Doctor's Center in McAllen, Texas, for $7.6 million.

• Capital Resources: As of December 31, 2023, UHT had $326.6 million in borrowings with $45.3 million of available borrowing capacity.

• Warning! GuruFocus has detected 8 Warning Signs with UHT.

On February 27, 2024, Universal Health Realty Income Trust (NYSE:UHT) released its 8-K filing, reporting its financial results for the fourth quarter and full year ended December 31, 2023. The healthcare REIT, which invests in a variety of healthcare and human service facilities, experienced a decrease in net income and funds from operations (FFO) both for the quarter and the year, compared to the same periods in 2022.

Financial Performance Overview

The company reported a Q4 net income of $3.6 million, or $.26 per diluted share, a decrease from $5.6 million, or $.41 per diluted share, in the fourth quarter of 2022. After adjusting for a loss on divestiture, the adjusted net income for Q4 was $3.8 million, or $.28 per diluted share. For the full year, net income was $15.4 million, or $1.11 per diluted share, down from $21.1 million, or $1.53 per diluted share, in 2022. The adjusted net income for the year was $15.6 million, or $1.13 per diluted share.

The decrease in adjusted net income was attributed to several factors, including an increase in interest expense due to higher average borrowing rates and outstanding borrowings, and a decrease related to a one-time settlement in 2022. However, these were partially offset by an increase in income generated at various properties.

FFO for Q4 decreased to $11.4 million, or $.82 per diluted share, from $12.4 million, or $.90 per diluted share, in the prior year's quarter. The full-year FFO also saw a decrease to $44.6 million, or $3.23 per diluted share, from $48.8 million, or $3.54 per diluted share, in 2022. The decline in FFO was primarily due to the decrease in adjusted net income, partially offset by an increase in depreciation and amortization expense.