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What in Store for Universal Health's (UHS) Q4 Earnings?

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Universal Health Services, Inc. (UHS - Free Report) is set to report fourth-quarter 2019 results on Feb 26, after market close.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $2.60, indicating a 9.7% increase from the year-ago reported figure.

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

In the quarter under review, the company’s performance is likely to have been fueled by both its Acute Care and Behavioral Health segments. Total patient revenues at both segments are expected to have risen on the back of inpatient and outpatient revenues. The consensus mark for total patient revenues at Acute Care and Behavioral Health suggests a 13.2% and 7.5% improvement from the respective prior-year reported numbers.

The Zacks Consensus Estimate for total revenues stands at $2.9 billion, implying growth of 4.8% from the year-earlier reported figure.

Licensed beds in Acute Care hospitals, which have been increasing since 2012, might maintain the momentum for fourth-quarter results as well. The Zacks Consensus Estimate for average licensed beds at the segment suggests a 0.8% rise from the year-ago reported number. However, licensed beds in the Behavioral Health segment might have dipped in the to-be-reported quarter.

Higher bed count is owing to the addition of facilities, new beds at the busiest acute care and behavioral health hospitals, medical surgical units, neonatal intensive care units, etc.

However, Universal Health is anticipated to have incurred escalating operating expenses due to higher salaries, wages and benefits plus other operating expenses, which in turn, might have negatively impacted earnings.

Interest expenses of the company are also likely to have persisted at elevated levels.

What the Quantitative Model States

Our proven model does not conclusively predict an earnings beat for Universal Health this season. This is because a stock needs the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

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 $2.61. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

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

Q3 Highlights and Surprise History

Universal Health delivered third-quarter 2019 adjusted earnings of $1.99 per share, missing the Zacks Consensus Estimate by 12%. Moreover, the bottom line decreased 10.8% year over year due to higher expenses.

The company managed to beat on earnings in two of the trailing four quarters, missing the same in the other two. The average trailing four-quarter negative miss is -1.4%.

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:

Aduro Biotech, Inc. is set to report fourth-quarter earnings on Feb 26. The stock has a Zacks Rank of 1 and an Earnings ESP of +23.08%.

AMAG Pharmaceuticals, Inc. is slated to announce fourth-quarter earnings on Feb 27. The stock has an Earnings ESP of +36.60% and a Zacks Ranks of 3.

Nevro Corp. (NVRO - Free Report) is set to report fourth-quarter earnings on Feb 25. It has a Zacks Rank #2 and an Earnings ESP of +3.45%.

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