HCA Healthcare stock was up about 12% in Friday pre-market trading as it reported second quarter earnings results that beat Wall Street expectations.

The Nashville, Tennessee-based for-profit chain reported $14.8 billion in revenue compared to $14.4 billion in the second quarter of 2021, beating expectations by 0.6%, according to a report by SVB Securities. Adjusted EBITDA came in at $3.04 billion, nearly 10% above SVB’s model.

Volumes: Executives on HCA’s Friday earnings call reported that volumes were returning to pre-pandemic seasonal trends, though they were less optimistic than in previous quarters for a boost in volumes driven by pent-up care delayed by the COVID-19 pandemic. Same-facility emergency room volumes remained high, rising 7.3% in Q2 compared to the same time last year. Meanwhile, same-facility inpatient surgeries declined 2.3% while same facility outpatient surgeries fell 1.4% year over year.

Labor costs: In the first quarter of this year, HCA lowered its full-year expectations citing ongoing labor challenges that hadn’t improved as swiftly as executives predicted. Contract labor use peaked in the first quarter. In the second quarter, contract labor use fell along with rates for those staff. Contract labor use and rates are expected to continue declining steadily through the year, executives said on the earnings call.

Still, expenses for salaries and benefits were up 6% year over year. Chief Financial Officer Bill Rutherford said the company made “fairly sizable” wage adjustments across the company this time last year and plans to give nurses another wage adjustment in the single digits this year. Turnover was down 20% in the second quarter compared to the first, Rutherford said.

Galen College of Nursing: HCA opened its eighth nursing school campus in Asheville, North Carolina, in June and plans to open three more this year. The hospital chain acquired a majority stake in Galen in 2020 in a bid to boost its long-term pipeline of new nurses and other healthcare staff as shortages of nursing educators and clinical sites pose challenges to systems across the country. HCA envisions having campuses in all major communities where it has hospitals in the future, CEO Sam Hazen said. When asked how many Galen graduates are taking full-time positions with HCA, Hazen said it’s too early to quantify, and currently only two schools operate in markets with HCA hospitals — in Tampa, Florida, and San Antonio, Texas.

Guidance: After lowering full-year expectations in the first quarter, HCA made no mention of forward guidance “likely to be interpreted as a reiteration of the prior range,” SVB Leerink analysts wrote in a note.