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What's in the Cards for Universal Health's (UHS) Q2 Earnings?

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Universal Health Services, Inc. (UHS - Free Report) is slated to report second-quarter 2021 results on Jul 26, after the closing bell. The company beat estimates in each of the trailing four quarters.

Factors to Note

Universal Health’s second-quarter revenues are likely to reflect the benefits of improving patient volumes, resumption of elective or scheduled procedures and better patient days. The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $3 billion, which indicates growth of 10.8% from the prior-year reported figure.

Strong performances at the Acute Care Hospital Services and Behavioral Health Care Services segments might have contributed to the to-be-reported quarter’s top line as well. Increased admissions are likely to have driven performances at both the segments in the second quarter.

The consensus mark for net revenues at both the segments suggests rise of 18.7% and 8.3%, respectively, from the year-ago quarter.

While the Zacks Consensus Estimate for patient days in Acute Care Hospitals highlights 21.9% improvement from the prior-year reported figure, the consensus estimate for Behavioral Health Centers reflects growth of 5.4% compared with the prior-year quarter. The metric is expected to have gained on the back of rebounding patient volumes in the to-be-reported quarter.

The consensus mark for average licensed beds at Acute Care Hospitals indicates growth of 1% from the prior-year quarter. Meanwhile, the same for Behavioral Health Centers suggests an improvement of 1.9% from the year-ago quarter’s reported number.

Per the company’s last earnings call, the board of directors sanctioned recommencement of its share buyback program in the second quarter.

However, Universal Health might have encountered elevated costs due to higher salaries, wages and other operating expenses. These costs are likely to have weighed on the to-be-reported quarter’s bottom line.  

The Zacks Consensus Estimate for second-quarter earnings stands at $2.75, which suggests a decline of 6.1% from the prior-year quarter.

What Our Quantitative Model Predicts

The proven Zacks model does not conclusively predict an earnings beat for Universal Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Universal Health has an Earnings ESP of -0.36%. This is because the Most Accurate Estimate of $2.74 is pegged lower than the Zacks Consensus Estimate of $2.75. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3.

Stocks to Consider

Some stocks worth considering from the medical space with a perfect combination of elements to surpass estimates in the upcoming quarterly releases are as follows:

Molina Healthcare, Inc. (MOH - Free Report) has an Earnings ESP of +2.40% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina, Inc. (ILMN - Free Report) has an Earnings ESP of +2.36% and a Zacks Rank #2, currently.

Encompass Health Corporation (EHC - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank of 2, presently.