The Q4 earnings season is at its peak with as many as 106 S&P 500 members set to release their quarterly results this week.So far, 170 S&P 500 members comprising 33.9% of the index’s total market capitalization have reported Q4 results. Per the latest Earnings Preview (dated Jan 27, 2017), total earnings for these companies increased 6% due to 3.1% growth in revenues, both on a year-over-year basis. While 64.1% companies beat the bottom-line estimate, 54.7% posted better-than-expected revenues.

Healthcare under the Medical sector is one of the seven sectors in the S&P 500 group. So far, 25.9% of the total Medical sector companies have reported fourth-quarter results. The sector is expected to deliver 2.9% earnings growth on 5.4% higher revenues in the fourth quarter.

Healthcare is part of the broader medical sector which includes diversified industries like health maintenance organizations (HMOs) popularly known as health insurers, clinical, laboratories and diagnostics research, medical equipment, hospitals, telehealth services and more.

In the HMO subsector, factors like a disappointing public exchange business, an increasing medical ratio, and the robust government business will be majorly affect the earnings of the players. Most insurers incurred losses from this business in the first nine months of the year and the trend is unlikely to reverse this quarter.

Nevertheless, HMO industry players are likely to have witnessed an increase in premium from the government businesses – Medicare, Medicare Advantage and Medicaid. A surge in the baby boomer population has led to higher demand for these policies.

In addition, a higher number of enrollees in the Medicare, Medicaid and Medicare Advantage businesses is expected to have driven membership growth in the fourth quarter. However, this upside might have been partly offset by a decline in membership on the public exchange business.

Here, we take a sneak peek at two healthcare stocks scheduled to report fourth-quarter figures on Jan 31:

Stocks to Watch for Earnings on Jan 31

Aetna Inc.’s results will largely reflect its continued strong performance in the Government business (Medicare and Medicaid) and focus on operating costs which will be to some extent offset by losses sustained in its ACA compliant products.

Within Aetna’s Government business, the performance of its Medicare business continues to be strong. Its solid membership growth in Medicare Advantage speaks of the execution of its growth strategy in Medicare. The company’s Medicaid business has also performed well so far this year and the trend is expected to continue in the fourth quarter too.

We expect the bottom line to benefit from the company’s cost reduction initiatives.

Nevertheless, ACA-compliant products weighed on the company’s results in the first nine months of 2016 and the pain is expected to be felt in the fourth quarter too. We expect to see membership declines in the company’s Commercial Insured business, primarily due to the attrition in its public exchange Individual and Small Group membership.

Also, Aetna’s bottom line will suffer from the suspension of share buyback as it utilizes funds to lower debt levels to below 40%.

Management projects earnings in the range of $7.95 to $8.05 per share for full-year 2016. It also expects year-end membership of approximately 23 million, With respect to the surprise trend, the company delivered positive surprises in each of the last four quarters, with an average beat of 6.25%. (Read more: Is Disappointment in Store for Aetna in Q4 Earnings?)

Last quarter, Aetna beat the Zacks Consensus Estimate by 2.48%. This time the company is unlikely to come up with a beat as the company has a Zacks Rank #4 (Sell) and an Earnings ESP, of 0.00%. Both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.45 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

HCA Holdings Inc. (HCA Quick QuoteHCA - Free Report) is expected to see an upside in earnings from its vast scale and diversified business mix that provide it with a competitive advantage in negotiating contracts and managing reimbursement uncertainty.

Though HCA Holdings is likely to experience increased margin pressure due to slower reimbursement growth, it is better equipped to offset these pressures on the back of its scale and business diversity, resulting in less earnings and cash flow volatility relative to its peers.

The company expects income before taxes and adjusted EBITDA of approximately $4.5 billion and $8.2 billion, both up 13% and 3.5% year over year, respectively. The company also expects same facility admissions to increase approximately 1.6% year over year. Same facility equivalent admissions, a measure of total inpatient and outpatient admissions, are expected to increase approximately 1.5%, which is lower than an increase of 2.9% in the prior-year quarter.

Last quarter, HCA Holdings beat the Zacks Consensus Estimate by 12.6%. As per our model, HCA Holdings has a chance of beating estimates this reporting cycle as it has a positive Earnings ESP and a favorable Zacks Rank. Its Earnings ESP is +1.12% as the Most Accurate Estimate stands at $1.80 per share, higher than the Zacks Consensus Estimate of $1.78. The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

With respect to the surprise trend, HCA Holdings surpassed expectations in each of the last four quarters, with an average beat of 14%. (Read more: Why HCA Holdings is Likely to Beat on Earnings in Q4 )