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DaVita (DVA) to Report Q3 Earnings: What's in the Offing?
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DaVita Inc. (DVA - Free Report) is scheduled to release third-quarter 2021 results on Oct 28, after market close.
In the last-reported quarter, the company’s earnings of $2.64 per share surpassed the Zacks Consensus Estimate by 23.4%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed the same in one, delivering an earnings surprise of 12.64%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
DaVita has been registering a steady growth of daily treatments over the past few months after being offset by the pandemic-led impacts. Given the slight ebb in new infections and continued vaccine roll out, we expect the company to have maintained its treatment momentum in the to-be-reported quarter, thus driving revenues.
The company, during its second-quarter earnings call in August, had confirmed that it was registering strong Research Triangle Park Dialysis performance over the past few months while also making efforts to manage its costs. This enabled the company to report robust results in the quarter despite continued pandemic-led challenges. Given the steady demand for kidney care, this momentum is likely to have continued in the to-be-reported quarter as well, thereby boosting quarterly revenues.
However, it is important to mention here that third-quarter revenues are likely to be offset by continued pandemic-led higher expenses due to higher personal protective equipment costs and the compounding effect of COVID-19-led patient mortality.
DaVita recorded an improvement in its U.S. dialysis revenue per treatment in the last-reported quarter primarily on the back of normal seasonal improvements from patients meeting their co-insurance and deductible obligations. Similar to the second quarter, favorable changes in government rate and mix, including the continued growth in the percentage of patients enrolled in Medicare Advantage, is likely to have continued in the third quarter as well. This is expected to significantly contribute to DaVita’s revenues in the to-be-reported quarter.
The company has been steadily making progress with its nephrology care line, which is a new physician-led entity with nephrologists. This, in turn, is expected to have continued to facilitate DaVita’s connection with the nephrologist practice in the third quarter, thereby contributing to top-line growth.
DaVita expanded its home kidney care program to include the HomeChoiceClaria Automated Peritoneal Dialysis system. This expansion was enabled by Sharesource remote patient monitoring from Baxter International Inc. (BAX - Free Report) . The company also extended its collaboration with Fresenius Medical Care’s North America wing to use the latter’s NxStage home hemodialysis machines and related technology for patients across the United States. These two factors are expected to have significantly boosted the robust adoption of its home dialysis program. Benefits of these developments are expected to get reflected in third-quarter results.
The Estimate Picture
For third-quarter 2021, the Zacks Consensus Estimate of $2.94 billion for total revenues implies an improvement of 0.5% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at $2.21, implying an uptick of 22.8% from the prior-year period’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:
Earnings ESP: DaVita has an Earnings ESP of +0.34%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a couple of medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Image: Bigstock
DaVita (DVA) to Report Q3 Earnings: What's in the Offing?
DaVita Inc. (DVA - Free Report) is scheduled to release third-quarter 2021 results on Oct 28, after market close.
In the last-reported quarter, the company’s earnings of $2.64 per share surpassed the Zacks Consensus Estimate by 23.4%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed the same in one, delivering an earnings surprise of 12.64%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
DaVita has been registering a steady growth of daily treatments over the past few months after being offset by the pandemic-led impacts. Given the slight ebb in new infections and continued vaccine roll out, we expect the company to have maintained its treatment momentum in the to-be-reported quarter, thus driving revenues.
The company, during its second-quarter earnings call in August, had confirmed that it was registering strong Research Triangle Park Dialysis performance over the past few months while also making efforts to manage its costs. This enabled the company to report robust results in the quarter despite continued pandemic-led challenges. Given the steady demand for kidney care, this momentum is likely to have continued in the to-be-reported quarter as well, thereby boosting quarterly revenues.
DaVita Inc. Price and EPS Surprise
DaVita Inc. price-eps-surprise | DaVita Inc. Quote
However, it is important to mention here that third-quarter revenues are likely to be offset by continued pandemic-led higher expenses due to higher personal protective equipment costs and the compounding effect of COVID-19-led patient mortality.
DaVita recorded an improvement in its U.S. dialysis revenue per treatment in the last-reported quarter primarily on the back of normal seasonal improvements from patients meeting their co-insurance and deductible obligations. Similar to the second quarter, favorable changes in government rate and mix, including the continued growth in the percentage of patients enrolled in Medicare Advantage, is likely to have continued in the third quarter as well. This is expected to significantly contribute to DaVita’s revenues in the to-be-reported quarter.
The company has been steadily making progress with its nephrology care line, which is a new physician-led entity with nephrologists. This, in turn, is expected to have continued to facilitate DaVita’s connection with the nephrologist practice in the third quarter, thereby contributing to top-line growth.
DaVita expanded its home kidney care program to include the HomeChoiceClaria Automated Peritoneal Dialysis system. This expansion was enabled by Sharesource remote patient monitoring from Baxter International Inc. (BAX - Free Report) . The company also extended its collaboration with Fresenius Medical Care’s North America wing to use the latter’s NxStage home hemodialysis machines and related technology for patients across the United States. These two factors are expected to have significantly boosted the robust adoption of its home dialysis program. Benefits of these developments are expected to get reflected in third-quarter results.
The Estimate Picture
For third-quarter 2021, the Zacks Consensus Estimate of $2.94 billion for total revenues implies an improvement of 0.5% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at $2.21, implying an uptick of 22.8% from the prior-year period’s reported number.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:
Earnings ESP: DaVita has an Earnings ESP of +0.34%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are a couple of medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Insulet Corporation (PODD - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +5.46% and a Zacks Rank of 2, at present.