What to Expect for Universal Health's (UHS) Q3 Earnings

Zacks Equity Research

Universal Health Services, Inc. UHS is set to report third-quarter 2019 results on Oct 24 after market close.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at $2.28, suggesting a 2.2% rise from the year-ago reported figure.

In the last reported quarter, the company reported adjusted earnings of $2.76 per share, beating the Zacks Consensus Estimate by 10.8%. Moreover, the bottom line improved 11.7% year over year and this upside is mainly attributable to rising revenues.

Let’s see how things are shaping up for this announcement.

Universal Health’s overall performance is expected to have been fueled by both its Acute Care and Behavioral Health segments. The Zacks Consensus Estimate for net revenues at its Acute Care and Behavioral Health segments implies an upside of 5.8% and 5.5%, respectively, from the prior-year reported numbers.

The Zacks Consensus Estimate for total revenues in the third quarter stands at $2.8 billion, indicating 4.1 % growth from the year-earlier reported figure.
Licensed beds in both Acute Care hospitals and the Behavioral Health centers have been increasing since 2012. The same is likely to have continued in the third quarter of 2019 on the back of additional facilities.

The Zacks Consensus Estimate for average licensed beds at Behavioral Health Centers hints at a 2.3% rise from the year-ago reported number. Also, the Zacks Consensus Estimate for average licensed beds at Acute Care Hospitals in the United States and Puerto Rico indicates an increase of 2.6% from the prior-year reported figure.

The company’s overall growth is likely to have been driven by  increased admissions at both its Acute Care hospitals and the Behavioral Health segments.

Continued share buybacks might have provided an additional impetus to the bottom line.

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 third-quarter earnings.

Interest expenses of the company might have remained at elevated levels.

What the Quantitative Model States

Our proven model does not conclusively predict an earnings beat for Universal Health this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Universal Health has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.28.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Universal Health Services, Inc. Price and EPS Surprise

Universal Health Services, Inc. Price and EPS Surprise

Universal Health Services, Inc. price-eps-surprise | Universal Health Services, Inc. Quote

Zacks Rank: Universal Health carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult for the stock this time around.

Stocks to Consider

Some stocks worth considering from the medical sector with the perfect mix of elements to surpass estimates in the next releases are as follows:

Mednax, Inc MD is set to report third-quarter earnings on Nov 1. The stock has a Zacks Rank of 3 and an Earnings ESP of +1.10%.

AmerisourceBergen Corporation ABC is slated to announce third-quarter earnings on Nov 7. The stock has an Earnings ESP of +0.55% and is Zacks #3 Ranked.

Molina Healthcare, Inc MOH is set to report third-quarter earnings on Oct 29. The stock has a Zacks Rank of 1 and an Earnings ESP of +0.92%.

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