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Universal Health (UHS) to Report Q3 Results: What to Expect

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Universal Health Services, Inc. (UHS - Free Report) is set to report third-quarter 2020 results on Oct 29, after market close.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $2.04 per share, indicating a 2.5% rise from the year-ago period’s reported figure.

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

In the quarter to be reported, the company’s performance is likely to have been dented by lower admissions. The volume of non-COVID patients is expected to have declined in the period.

The company’s segments, namely Acute Care and Behavioral Health, which have been contributing to its top line over the last several quarters, might affect results due to the coronavirus pandemic.

Acute care facilities are likely to have taken a hit from rising COVID-19 cases and decreasing non-COVID patients.

The second wave of COVID-19 cases might have adversely impacted the company’s overall performance to an extent.

The consensus mark for net revenues at Acute Care and Behavioral Health suggests a 2.7% and 3.3% fall each from the respective prior-year reported numbers.

The company is likely to have witnessed lower emergency room visits as well as elective or scheduled procedures.

The Zacks Consensus Estimate for total revenues stands at $2.7 billion, implying a 2.7% slip from the year-earlier reported figure.

The consensus estimate for average licensed beds at Behavorial Health segment suggests a 0.2% dip while the same for acute care (United States and Puerto Rico) indicates an increase of 1%.

At Behavorial Health Centers, the consensus mark for patient days hints at a decline of 14.4% due to contracting patient volumes. While the estimate for patient days for acute care (United States and Puerto Rico) indicates a 19.4% drop from the prior-year reported figure.

Also, the company is expected to have incurred escalating expenses due to higher salaries, wages and benefits plus other operating expenses, which in turn, might have weighed on its margins.

What the Quantitative Model States

Our proven model doesn’t predict an earnings beat for Universal Health this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise, 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 $2.04. 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.

Q2 Highlights and Surprise History

Universal Health reported second-quarter 2020 adjusted earnings of $2.93 per share, which outpaced the Zacks Consensus Estimate by 463.5%. The bottom line also improved 6.2% year over year.

Lower costs and net revenue recognition of around $218 million related to various governmental stimulus programs benefited the results.

The company’s earnings managed to beat estimates in two of the trailing four quarters and missed the same in the remaining two. The average trailing four-quarter surprise is 106.3%.

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:

Select Medical Holdings Corporation (SEM - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank # 2, currently. The company is scheduled to release third-quarter earnings on Oct 29.

Bausch Health Cos Inc. (BHC - Free Report) is set to report third-quarter earnings on Nov 3. The stock is currently a #3 Ranked player and has an Earnings ESP of +5.80%.

Canopy Growth Corporation (CGC - Free Report) is set to report third-quarter earnings on Nov 12. The stock presently has a Zacks Rank of 3 and an Earnings ESP of +7.55%.

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