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What's in the Cards for HCA Healthcare's (HCA) Q2 Earnings?
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HCA Healthcare, Inc. (HCA - Free Report) is slated to report second-quarter 2022 results on Jul 22, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for HCA Healthcare’s second-quarter earnings per share is pegged at $3.67, which indicates a decline of 16% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $14.9 billion, suggesting a 3% growth from the year-ago quarter’s reported number.
Earnings Surprise History
HCA Healthcare has a decent earnings surprise history. Its bottom line beat estimates in two of the trailing four quarters and missed the same twice, the average surprise being 10.74%. This is depicted in the chart below:
Revenues of HCA Healthcare are likely to have benefited from an increase in same facility admissions in the second quarter. Its in-patient business might have been driven by solid acuity levels and payer mix, paving the way for a rise in in-patient surgeries in the to-be-reported quarter.
Meanwhile, the top line of HCA is expected to reflect gains from improved outpatient volumes stemming from higher same-facility emergency room visits and same-facility outpatient surgeries.
The Zacks Consensus Estimate for HCA Healthcare’s second-quarter equivalent admissions hints toward a 0.5% rise from the prior-year quarter’s reported figure. Yet, the consensus mark for the total number of hospitals suggests a decline of 2.7% from the year-earlier reported figure.
However, elevated labor costs stemming from labor supply constraints, which are plaguing the entire United States, may have weighed on the margins of HCA in the quarter to be reported. The challenges prevailing in the labor market have been compelling healthcare providers to use contract labor and bear linked hourly rates for these contracts. To counter these labor headwinds, HCA Healthcare has been resorting to significant investments in boosting employee retention and recruitment efforts and utilization of new case management models and technology solutions to better capacity management capabilities. Though these initiatives are expected to fetch the healthcare provider benefits over the long term, these investments might have resulted in escalating costs in the to-be-reported quarter.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for HCA Healthcare this time. 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. However, that’s not the case here.
Earnings ESP: HCA Healthcare has an Earnings ESP of -4.63% because the Most Accurate Estimate of $3.50 is pegged lower than the Zacks Consensus Estimate of $3.67. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HCA currently has a Zacks Rank #5 (Strong Sell).
While an earnings beat looks uncertain for HCA Healthcare, here are some companies from the Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
Merck & Co., Inc. (MRK - Free Report) has an Earnings ESP of +7.18% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for Merck’s second-quarter 2022 earnings is pegged at $7.31, which indicates a 21.4% increase from the prior-year quarter’s reported figure.
MRK beat earnings estimates in three of the trailing four quarters and missed once.
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for Alcon’s second-quarter 2022 earnings is pegged at $2.41, which indicates a 12.1% increase from the prior-year quarter’s reported figure.
ALC beat earnings estimates in each of the trailing four quarters.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +4.73% and a Zacks Rank #3, currently. The Zacks Consensus Estimate for Centene's second-quarter 2022 earnings is pegged at $5.64, which indicates a 9.5% increase from the prior-year quarter’s reported figure.
The consensus mark for CNC’s second-quarter earnings has moved 11.9% north over the past 30 days.
Image: Shutterstock
What's in the Cards for HCA Healthcare's (HCA) Q2 Earnings?
HCA Healthcare, Inc. (HCA - Free Report) is slated to report second-quarter 2022 results on Jul 22, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for HCA Healthcare’s second-quarter earnings per share is pegged at $3.67, which indicates a decline of 16% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $14.9 billion, suggesting a 3% growth from the year-ago quarter’s reported number.
Earnings Surprise History
HCA Healthcare has a decent earnings surprise history. Its bottom line beat estimates in two of the trailing four quarters and missed the same twice, the average surprise being 10.74%. This is depicted in the chart below:
HCA Healthcare, Inc. Price and EPS Surprise
HCA Healthcare, Inc. price-eps-surprise | HCA Healthcare, Inc. Quote
Factors to Note
Revenues of HCA Healthcare are likely to have benefited from an increase in same facility admissions in the second quarter. Its in-patient business might have been driven by solid acuity levels and payer mix, paving the way for a rise in in-patient surgeries in the to-be-reported quarter.
Meanwhile, the top line of HCA is expected to reflect gains from improved outpatient volumes stemming from higher same-facility emergency room visits and same-facility outpatient surgeries.
The Zacks Consensus Estimate for HCA Healthcare’s second-quarter equivalent admissions hints toward a 0.5% rise from the prior-year quarter’s reported figure. Yet, the consensus mark for the total number of hospitals suggests a decline of 2.7% from the year-earlier reported figure.
However, elevated labor costs stemming from labor supply constraints, which are plaguing the entire United States, may have weighed on the margins of HCA in the quarter to be reported. The challenges prevailing in the labor market have been compelling healthcare providers to use contract labor and bear linked hourly rates for these contracts. To counter these labor headwinds, HCA Healthcare has been resorting to significant investments in boosting employee retention and recruitment efforts and utilization of new case management models and technology solutions to better capacity management capabilities. Though these initiatives are expected to fetch the healthcare provider benefits over the long term, these investments might have resulted in escalating costs in the to-be-reported quarter.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for HCA Healthcare this time. 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. However, that’s not the case here.
Earnings ESP: HCA Healthcare has an Earnings ESP of -4.63% because the Most Accurate Estimate of $3.50 is pegged lower than the Zacks Consensus Estimate of $3.67. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HCA currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While an earnings beat looks uncertain for HCA Healthcare, here are some companies from the Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
Merck & Co., Inc. (MRK - Free Report) has an Earnings ESP of +7.18% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for Merck’s second-quarter 2022 earnings is pegged at $7.31, which indicates a 21.4% increase from the prior-year quarter’s reported figure.
MRK beat earnings estimates in three of the trailing four quarters and missed once.
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for Alcon’s second-quarter 2022 earnings is pegged at $2.41, which indicates a 12.1% increase from the prior-year quarter’s reported figure.
ALC beat earnings estimates in each of the trailing four quarters.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +4.73% and a Zacks Rank #3, currently. The Zacks Consensus Estimate for Centene's second-quarter 2022 earnings is pegged at $5.64, which indicates a 9.5% increase from the prior-year quarter’s reported figure.
The consensus mark for CNC’s second-quarter earnings has moved 11.9% north over the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.