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HCA Holdings, Inc. (HCA - Snapshot Report) anticipates adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for 2013 to be about $7.15–7.25 billion, $65 to $75 million above the high-end of its previous guidance of $6.25 to $6.50 billion. The new expectation translates into a year-over-year improvement of 9.5%–11%.

The improved outlook prompted a 0.9% increase in the company’s share price that closed at $51.41 yesterday.

HCA Holdings is scheduled to report its fourth quarter and 2013 earnings results on Feb 4. With respect to earnings performance, the company reported non-GAAP earning of 79 cents per share on revenues of $9.2 billion in the first quarter, earning of 91 cents per share on revenues of $8.5 billion in the second quarter, and again earnings of 79 cents per share on revenues of $8.5 billion in the third quarter. HCA delivered a negative earnings surprise in the first quarter, a positive surprise in the second quarter and in-line earnings in the third quarter.  

Looking forward to the fourth-quarter performance, our proven model shows that HCA Holdings is likely to beat earnings because it has the right combination of two key ingredients – a Zacks Rank #2 (Buy) and Earnings ESP of +2.44%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at 82 cents, translating into a year-over-year decline of 9.8%. The same for 2013 is $3.31, representing a 10.8% year-over-year decrease.

Patient volumes, as expressed in same-facility admissions, in the fourth quarter is also expected to witness growth,  consistent with the trend experienced in the first nine months of 2013.

HCA Holdings also expects to invest more than $2 billion in 2014 to fund growth projects. The company had spent more than $5.2 billion in such projects over the last three years.

HCA Holdings also expects to benefit from the Affordable Care Act going forward.

Other Stocks to Consider

Other stocks in the medical care space worth considering include Almost Family Inc. (AFAM - Snapshot Report), Addus HomeCare Corp. (ADUS - Snapshot Report) and VCA Antech Inc. (WOOF - Snapshot Report). While Almost Family and Addus HomeCare sport a Zacks Rank #1 (Strong Buy), VCA Antech shares the same Zacks Rank with HCA Holdings.

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