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Is a Beat Likely for Universal Health (UHS) Q1 Earnings?

Zacks Equity Research

Universal Health Services, Inc. UHS is set to report first-quarter 2019 results on Apr 25 after market close. In the last reported quarter, the company delivered adjusted earnings of $2.37 per share, beating the Zacks Consensus Estimate by 0.9%.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $2.60, up 6.1% year over year.

So, let’s see how things are shaping up for this announcement.

Overall performance of the company is likely to have been fueled by solid performances at both its Acute Care and Behavioral Health segments.

Licensed beds in both Acute Care hospitals and the Behavioral Health centers, which have been increasing since 2012, are expected to maintain the momentum in first-quarter results as well. The bed count is likely to have increased on the back of acquisitions and addition of facilities in the first quarter.

Further, this higher bed count is expected to have aided admissions across both Acute Care and Behavioral Health segments during the first quarter.

The Zacks Consensus Estimate for total revenues in the first quarter is pegged at $2.8 billion, indicating growth of 4.8% from the year-ago reported figure.

Also, the company might have consistently enhanced its shareholder value in the period under review.

However, Universal Health is anticipated to have incurred escalating operating expenses due to higher salaries, wages and benefits plus other operating expenses, which could negatively impact its first-quarter earnings.

What the Quantitative Model States

Our proven model conclusively shows that Universal Health is likely to beat on earnings this to-be-reported quarter. This is because the stock has the two key ingredients of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to this end.

Earnings ESP: Universal Health has an Earnings ESP of +0.34%. This is because the Most Accurate Estimate is pegged at $2.61, higher than the Zacks Consensus Estimate of $2.60. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Universal Health Services, Inc. Price and EPS Surprise

Universal Health Services, Inc. Price and EPS Surprise | Universal Health Services, Inc. Quote

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Zacks Rank: Universal Health carries a Zacks Rank #3, which increases the predictive power of ESP. Alongside a positive ESP in the combination, the stock has significantly higher chances of beating estimates this earnings season.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Some other stocks worth considering from the medical sector with the perfect mix of elements to also surpass estimates this time around are:

Molina Healthcare, Inc MOH has an Earnings ESP of +3.49% and a Zacks Rank of 1. The company is scheduled to announce first-quarter financial numbers on Apr 29. You can see the complete list of today’s Zacks #1 Rank stocks here.

Community Health Systems, Inc. CYH is set to report first-quarter 2019 earnings performance on Apr 30. The stock has an Earnings ESP of +12.66% and a Zacks Rank #2.

Humana Inc. HUM is slated to release first-quarter earnings figures on May 1. This stock has an Earnings ESP of +0.84% and a Zacks Rank of 3.

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Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
 
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Community Health Systems, Inc. (CYH) : Free Stock Analysis Report
 
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