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Can These 3 Hospital Stocks Beat Q2 Earnings Expectations?
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The second-quarter earnings season for Hospital companies is likely characterized by the ongoing resumption of elective procedures, growing patient volumes, admission and utilization of resources. Continuous technological advancements are also expected to have boosted efficiency efforts within the industry during this period.
The hospital space belongs to the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), overall earnings of which are projected to increase 18.4% from the year-ago quarter’s reported figure. Revenues are expected to inch up 7.2%, as indicated by our latest Earnings Preview.
Leading hospital companies like Tenet Healthcare Corporation (THC - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and Community Health Systems, Inc. (CYH - Free Report) are scheduled to release their results on Jul 24, 2024. Before checking the key projections for these stocks, let's take a look at the general factors that are likely to shape the companies’ upcoming results.
What to Watch: Influences on Q2 Hospital Stock Results
The increase in elective procedures, as seniors resumed treatments postponed due to the pandemic, likely boosted patient volumes for hospital companies. This surge in volumes is expected to have driven revenues higher. Additionally, an aging U.S. population and the growing prevalence of diseases have continued to push demand for hospital services higher, likely increasing revenues per patient in the second quarter.
However, the rise in admissions, occupancy levels and service utilization likely led to higher medical and operating costs in the to-be-reported quarter, partially offsetting profit growth. Furthermore, expenses related to salaries, wages and benefits are expected to have continued growing amid easing staffing challenges. Industry players are expected to have faced increased competition and utilization of ambulatory care services in the quarter.
The second quarter is also likely to have witnessed continued healthcare infrastructure investments, expansion and modernization of hospital facilities and enhancing capacity to meet the growing demand. The integration of artificial intelligence (AI) and automation alongside real-time analytics is expected to have continued in the second quarter. This improves efficiency, clinical workflow management and medical diagnoses, leading to reduced patient wait times and treatment costs.
Merger-and-acquisition activity within hospitals and health systems is on the rise. The fragmented industry is likely to have witnessed several strategic acquisitions in the quarter aimed at financial synergies through cost savings, geographic expansion and broadening service offerings.
Hospital Stocks Reporting on Jul 24
Against the backdrop discussed above, let’s find out how the following three companies are placed ahead of their second-quarter earnings release tomorrow.
Our proprietary model clearly indicates that a company needs to have the right combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tenet Healthcare: The Zacks Consensus Estimate and our model estimate for adjusted patient admissions in total hospital operations suggest 1.3% growth in the second quarter from a year ago. The consensus mark for net patient revenues per adjusted admission in total Hospital in the quarter under review indicates almost a 6% year-over-year jump. The consensus estimate for the Ambulatory Care segment’s operating revenues suggests an 11.7% rise from the year-ago period.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $1.89 per share and $5 billion, respectively, indicating an earnings increase of 31.3% but a revenue decline of 2% from the corresponding year-ago quarter’s actuals. As far as earnings surprises are concerned, Tenet Healthcare’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 56.5%.
Tenet Healthcare Corporation Price and EPS Surprise
Our proven model predicts a likely earnings beat for THC this time around. This is because the stock has an Earnings ESP of +4.11% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health: The Zacks Consensus Estimate for Universal Health’s net revenues in the Acute Care Hospital Services segment is pegged at $2.2 billion, indicating an 8.4% year-over-year jump. The consensus mark for net revenues in the Behavioral Health Care Services segment is pegged at $1.7 billion, which also signals 8.4% growth from the year-ago level. Our model estimates for salaries, wages and benefits, and supplies expenses suggest increases of 6.3% and 5%, respectively, from a year ago.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $3.37 per share and $3.9 billion, respectively, indicating an earnings jump of 33.2% and a revenue increase of 8.5% from the corresponding year-ago quarter’s actuals. Universal Health’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.1%. (Read more: Will Patient Volumes Drive Universal Health's Q2 Earnings?)
Universal Health Services, Inc. Price and EPS Surprise
Our proven model predicts a likely earnings beat for UHS this time around. This is because the stock has an Earnings ESP of +8.65% and a Zacks Rank #2.
Community Health: The Zacks Consensus Estimate for same-store occupancy rate is pegged at 52.72% for the second quarter, higher than the year-ago level of 49.30%. CYH’s second-quarter earnings are expected to have gained from improved reimbursement rates and lower contract labor expenses, partially offset by reduced patient days. The consensus mark for adjusted admissions in the second quarter indicates a 4% year-over-year decline.
The Zacks Consensus Estimate for the to-be-reported quarter’s bottom line is pegged at a loss of 11 cents per share, indicating an improvement of 50% year over year. The consensus mark for the top line is pegged at $3.1 billion, signaling a 1.1% decline from a year ago. As far as earnings surprises are concerned, Community Health’s bottom line beat the Zacks Consensus Estimate in two of the last four quarters and missed twice, the average negative surprise being 380.6%.
Community Health Systems, Inc. Price and EPS Surprise
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Can These 3 Hospital Stocks Beat Q2 Earnings Expectations?
The second-quarter earnings season for Hospital companies is likely characterized by the ongoing resumption of elective procedures, growing patient volumes, admission and utilization of resources. Continuous technological advancements are also expected to have boosted efficiency efforts within the industry during this period.
The hospital space belongs to the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), overall earnings of which are projected to increase 18.4% from the year-ago quarter’s reported figure. Revenues are expected to inch up 7.2%, as indicated by our latest Earnings Preview.
Leading hospital companies like Tenet Healthcare Corporation (THC - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and Community Health Systems, Inc. (CYH - Free Report) are scheduled to release their results on Jul 24, 2024. Before checking the key projections for these stocks, let's take a look at the general factors that are likely to shape the companies’ upcoming results.
What to Watch: Influences on Q2 Hospital Stock Results
The increase in elective procedures, as seniors resumed treatments postponed due to the pandemic, likely boosted patient volumes for hospital companies. This surge in volumes is expected to have driven revenues higher. Additionally, an aging U.S. population and the growing prevalence of diseases have continued to push demand for hospital services higher, likely increasing revenues per patient in the second quarter.
However, the rise in admissions, occupancy levels and service utilization likely led to higher medical and operating costs in the to-be-reported quarter, partially offsetting profit growth. Furthermore, expenses related to salaries, wages and benefits are expected to have continued growing amid easing staffing challenges. Industry players are expected to have faced increased competition and utilization of ambulatory care services in the quarter.
The second quarter is also likely to have witnessed continued healthcare infrastructure investments, expansion and modernization of hospital facilities and enhancing capacity to meet the growing demand. The integration of artificial intelligence (AI) and automation alongside real-time analytics is expected to have continued in the second quarter. This improves efficiency, clinical workflow management and medical diagnoses, leading to reduced patient wait times and treatment costs.
Merger-and-acquisition activity within hospitals and health systems is on the rise. The fragmented industry is likely to have witnessed several strategic acquisitions in the quarter aimed at financial synergies through cost savings, geographic expansion and broadening service offerings.
Hospital Stocks Reporting on Jul 24
Against the backdrop discussed above, let’s find out how the following three companies are placed ahead of their second-quarter earnings release tomorrow.
Our proprietary model clearly indicates that a company needs to have the right combination of two key elements — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tenet Healthcare: The Zacks Consensus Estimate and our model estimate for adjusted patient admissions in total hospital operations suggest 1.3% growth in the second quarter from a year ago. The consensus mark for net patient revenues per adjusted admission in total Hospital in the quarter under review indicates almost a 6% year-over-year jump. The consensus estimate for the Ambulatory Care segment’s operating revenues suggests an 11.7% rise from the year-ago period.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $1.89 per share and $5 billion, respectively, indicating an earnings increase of 31.3% but a revenue decline of 2% from the corresponding year-ago quarter’s actuals. As far as earnings surprises are concerned, Tenet Healthcare’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average being 56.5%.
Tenet Healthcare Corporation Price and EPS Surprise
Tenet Healthcare Corporation price-eps-surprise | Tenet Healthcare Corporation Quote
Our proven model predicts a likely earnings beat for THC this time around. This is because the stock has an Earnings ESP of +4.11% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Universal Health: The Zacks Consensus Estimate for Universal Health’s net revenues in the Acute Care Hospital Services segment is pegged at $2.2 billion, indicating an 8.4% year-over-year jump. The consensus mark for net revenues in the Behavioral Health Care Services segment is pegged at $1.7 billion, which also signals 8.4% growth from the year-ago level. Our model estimates for salaries, wages and benefits, and supplies expenses suggest increases of 6.3% and 5%, respectively, from a year ago.
The Zacks Consensus Estimate for the second-quarter earnings and top line stands at $3.37 per share and $3.9 billion, respectively, indicating an earnings jump of 33.2% and a revenue increase of 8.5% from the corresponding year-ago quarter’s actuals. Universal Health’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.1%. (Read more: Will Patient Volumes Drive Universal Health's Q2 Earnings?)
Universal Health Services, Inc. Price and EPS Surprise
Universal Health Services, Inc. price-eps-surprise | Universal Health Services, Inc. Quote
Our proven model predicts a likely earnings beat for UHS this time around. This is because the stock has an Earnings ESP of +8.65% and a Zacks Rank #2.
Community Health: The Zacks Consensus Estimate for same-store occupancy rate is pegged at 52.72% for the second quarter, higher than the year-ago level of 49.30%. CYH’s second-quarter earnings are expected to have gained from improved reimbursement rates and lower contract labor expenses, partially offset by reduced patient days. The consensus mark for adjusted admissions in the second quarter indicates a 4% year-over-year decline.
The Zacks Consensus Estimate for the to-be-reported quarter’s bottom line is pegged at a loss of 11 cents per share, indicating an improvement of 50% year over year. The consensus mark for the top line is pegged at $3.1 billion, signaling a 1.1% decline from a year ago. As far as earnings surprises are concerned, Community Health’s bottom line beat the Zacks Consensus Estimate in two of the last four quarters and missed twice, the average negative surprise being 380.6%.
Community Health Systems, Inc. Price and EPS Surprise
Community Health Systems, Inc. price-eps-surprise | Community Health Systems, Inc. Quote
CYH has an Earnings ESP of 0.00% and a Zacks Rank of 3.
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