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The Zacks Consensus Estimate for second-quarter earnings per share of $4.97 indicates a 15.9% increase from the prior-year figure of $4.29. The estimate increased 6 cents in the past 30 days. The consensus estimate for second-quarter revenues of $17.1 billion indicates 7.9% growth from the year-ago reported figure.
Image Source: Zacks Investment Research
HCA Healthcare beat the consensus estimate for earnings in three of the prior four quarters, missing once, with the average being 5.6%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for HCA Healthcare this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: HCA Healthcare has an Earnings ESP of +7.10%. This is because the Most Accurate Estimate is currently pegged at $5.32 per share, higher than the Zacks Consensus Estimate of $4.97. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HCA Healthcare currently has a Zacks Rank #2.
Factors Likely to Shape Q2 Results
HCA Healthcare’s second-quarter revenues are likely to have benefited from rising patient volumes, occupancy rates and other associated metrics. As seniors have resumed elective procedures that were previously postponed due to pandemic-related constraints, these metrics are expected to benefit as a result. Coupled with rising revenue per equivalent admission, the growing volumes will continue boosting the hospital company’s top line.
Considering the second quarter, the Zacks Consensus Estimate for admissions indicates 4.2% year-over-year growth, while the same for equivalent patient days hints at a 4.3% increase. The consensus mark for revenue per equivalent admission signals a 3.2% rise from the year-ago period. Additionally, the consensus estimate for Medicare and Medicaid revenues in the second quarter suggests nearly 8.8% and 22% year-over-year increases, respectively. Reduced length of stay coupled with better inpatient capacity management is expected to benefit the second-quarter results.
Improved payer mix is expected to have aided commercial volumes in the second quarter of 2024. As private insurance customers pay more than Medicare or Medicaid, better commercial volumes are likely to offset any negative impact due to the Medicaid redetermination process.
An aging U.S. population, along with rising cases of diseases, is bound to boost the demand for hospital services. HCA Healthcare continues to increase its capabilities through strategic acquisitions to address that growing demand, which will support its volume.
However, investors should keep in mind that rising patient volumes will also boost HCA’s expenses, especially in salaries and benefits, supply costs and other operating costs. This is likely to have trimmed its margins. For the second quarter of 2024, our model suggests a nearly 7.5% year-over-year increase in its total operating expenses.
Price Performance
HCA Healthcare stock has exhibited an upward movement, gaining a notable percentage in the year-to-date period. The stock has rallied 18.5% compared with the industry’s rise of 20.4% in the same time frame. The stock outperformed its sector and S&P 500 index which increased 6.9% and 16.1%, respectively, in the same period.
Image Source: Zacks Investment Research
Conclusion
Improving admissions, revenue per equivalent admissions, and better payer mix are likely to have offset the negative impact of rising expenses, resulting in an earnings beat in the second quarter. An aging U.S. population is also expected to have made a positive impact on the demand for HCA’s services in the second quarter.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader Medical space, as our model shows that these, too, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for Cigna’s second-quarter earnings indicates a 4.7% year-over-year jump. CI beat earnings estimates in each of the past four quarters, the average surprise being 3.3%.
Cencora, Inc. (COR - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2.
The Zacks Consensus Estimate for Cencora’s second-quarter earnings indicates 8.9% year-over-year growth. COR beat earnings estimates in each of the past four quarters, with an average surprise of 6.1%.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +8.65% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Universal Health’s second-quarter earningsindicates a 33.2% year-over-year jump. UHS beat earnings estimates in each of the past four quarters, the average surprise being 8.1%.
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Can HCA Healthcare (HCA) Beat Q2 Earnings on Growing Admissions?
HCA Healthcare, Inc. (HCA - Free Report) is scheduled to report second-quarter 2024 results on Jul 23, before the opening bell.
The Zacks Consensus Estimate for second-quarter earnings per share of $4.97 indicates a 15.9% increase from the prior-year figure of $4.29. The estimate increased 6 cents in the past 30 days. The consensus estimate for second-quarter revenues of $17.1 billion indicates 7.9% growth from the year-ago reported figure.
Image Source: Zacks Investment Research
HCA Healthcare beat the consensus estimate for earnings in three of the prior four quarters, missing once, with the average being 5.6%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for HCA Healthcare this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: HCA Healthcare has an Earnings ESP of +7.10%. This is because the Most Accurate Estimate is currently pegged at $5.32 per share, higher than the Zacks Consensus Estimate of $4.97. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HCA Healthcare currently has a Zacks Rank #2.
Factors Likely to Shape Q2 Results
HCA Healthcare’s second-quarter revenues are likely to have benefited from rising patient volumes, occupancy rates and other associated metrics. As seniors have resumed elective procedures that were previously postponed due to pandemic-related constraints, these metrics are expected to benefit as a result. Coupled with rising revenue per equivalent admission, the growing volumes will continue boosting the hospital company’s top line.
Considering the second quarter, the Zacks Consensus Estimate for admissions indicates 4.2% year-over-year growth, while the same for equivalent patient days hints at a 4.3% increase. The consensus mark for revenue per equivalent admission signals a 3.2% rise from the year-ago period. Additionally, the consensus estimate for Medicare and Medicaid revenues in the second quarter suggests nearly 8.8% and 22% year-over-year increases, respectively. Reduced length of stay coupled with better inpatient capacity management is expected to benefit the second-quarter results.
Improved payer mix is expected to have aided commercial volumes in the second quarter of 2024. As private insurance customers pay more than Medicare or Medicaid, better commercial volumes are likely to offset any negative impact due to the Medicaid redetermination process.
An aging U.S. population, along with rising cases of diseases, is bound to boost the demand for hospital services. HCA Healthcare continues to increase its capabilities through strategic acquisitions to address that growing demand, which will support its volume.
However, investors should keep in mind that rising patient volumes will also boost HCA’s expenses, especially in salaries and benefits, supply costs and other operating costs. This is likely to have trimmed its margins. For the second quarter of 2024, our model suggests a nearly 7.5% year-over-year increase in its total operating expenses.
Price Performance
HCA Healthcare stock has exhibited an upward movement, gaining a notable percentage in the year-to-date period. The stock has rallied 18.5% compared with the industry’s rise of 20.4% in the same time frame. The stock outperformed its sector and S&P 500 index which increased 6.9% and 16.1%, respectively, in the same period.
Image Source: Zacks Investment Research
Conclusion
Improving admissions, revenue per equivalent admissions, and better payer mix are likely to have offset the negative impact of rising expenses, resulting in an earnings beat in the second quarter. An aging U.S. population is also expected to have made a positive impact on the demand for HCA’s services in the second quarter.
Other Stocks That Warrant a Look
Here are some other companies worth considering from the broader Medical space, as our model shows that these, too, have the right combination of elements to beat on earnings this time around:
The Cigna Group (CI - Free Report) has an Earnings ESP of +1.59% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cigna’s second-quarter earnings indicates a 4.7% year-over-year jump. CI beat earnings estimates in each of the past four quarters, the average surprise being 3.3%.
Cencora, Inc. (COR - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2.
The Zacks Consensus Estimate for Cencora’s second-quarter earnings indicates 8.9% year-over-year growth. COR beat earnings estimates in each of the past four quarters, with an average surprise of 6.1%.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +8.65% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Universal Health’s second-quarter earningsindicates a 33.2% year-over-year jump. UHS beat earnings estimates in each of the past four quarters, the average surprise being 8.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.