Key Highlights

  • Universal Health Realty Income Trust reported third quarter net income of USD 4.9 million, or USD 0.35 per diluted share.
  • Results compare with USD 4.0 million, or USD 0.29 per diluted share, in the third quarter of 2025.
  • Funds from operations increased to USD 12.3 million, or USD 0.88 per diluted share, from USD 12.2 million a year earlier.
  • The company declared a third quarter dividend of USD 0.75 per share, paid on September 30, 2026.

Net Income Rises on Favorable Year-Over-Year Comparison

Universal Health Realty Income Trust (NYSE:UHT) reported third quarter net income of USD 4.9 million, or USD 0.35 per diluted share, compared with USD 4.0 million, or USD 0.29 per diluted share, in the third quarter of 2025. The USD 913,000 increase in net income consisted primarily of a USD 901,000 benefit from the non-recurrence of a depreciation expense item recorded in the third quarter of 2025.

An additional USD 287,000 increase resulted from lower interest expense due to a decrease in the company's average effective borrowing rate, which reflects the impact of various interest rate swap agreements, partially offset by higher average borrowings outstanding under the company's credit agreement. These gains were partially offset by a USD 275,000 decrease tied to a one-time settlement and release agreement executed in the third quarter of 2025 related to one of the company's medical office buildings.

Funds From Operations Show Modest Growth

Funds from operations, which excludes depreciation and amortization expense, increased by USD 53,000 to USD 12.3 million, or USD 0.88 per diluted share, compared with USD 12.2 million, or USD 0.88 per diluted share, a year earlier. For the nine months ended September 30, 2026, net income was USD 15.9 million, or USD 1.14 per diluted share, compared with USD 13.3 million, or USD 0.96 per diluted share, in the same period of 2025.

The nine month period included a USD 724,000 gain on the sale of land recorded in the second quarter of 2026; excluding this gain, adjusted net income for the nine month period was USD 15.1 million, or USD 1.09 per diluted share. FFO for the nine month period, which excludes depreciation, amortization and the land sale gain, was USD 37.1 million, or USD 2.67 per diluted share, up from USD 35.9 million, or USD 2.59 per diluted share, a year earlier.

Dividend and Interest Rate Considerations

The company declared a third quarter dividend of USD 0.75 per share, or USD 10.4 million in the aggregate, paid on September 30, 2026. The company noted that increases in interest rates over the past several years have substantially increased its borrowing costs and could continue to affect its ability to access capital markets on favorable terms.

Continued benefit from the interest rate swap agreements that lowered this quarter's average effective borrowing rate could support further interest expense savings, while additional increases in interest rates remain a risk factor the company has flagged for its future results of operations.

FFO and Interest Rate Metrics to Track

FFO per diluted share relative to the USD 0.88 reported this quarter, continued interest expense trends tied to the company's swap agreements and credit facility borrowings, and the dividend relative to the USD 0.75 per share rate declared this quarter are among the items that may shape how the fourth quarter compares with this result.