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Universal Health (UHS) to Post Q1 Earnings: What's in Store?

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Universal Health Services, Inc. (UHS - Free Report) is set to report first-quarter 2022 results on Apr 25, after the closing bell.

The medical care facility provider reported adjusted earnings of $2.95 per share in the fourth quarter, beating the Zacks Consensus Estimate of $2.83 due to higher patient days and adjusted admissions. Also, the company’s strategic moves like rate increases in the Kentucky Medicaid Managed Care Hospital aided the results. The positives were partially offset by escalating expenses.

Let’s see how things have shaped up prior to the first-quarter earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for first-quarter earnings per share of $2.47 suggests a 1.2% increase from the prior-year figure of $2.44. No estimate revision has been witnessed by the company in the past week. The consensus estimate for first-quarter revenues of $3.2 billion indicates a 6.9% increase from the year-ago reported figure.

Universal Health beat the consensus estimate for earnings in three of the prior four quarters and missed once, with the average surprise being 12.5%. This is depicted in the graph below:

Factors to Note

UHS’ first-quarter results are likely to reflect the benefits of improving patient volumes including acute and behavioral patient days, emergency room visits, and the resumption of elective or scheduled procedures. Increased admissions are likely to have driven its performance in the first quarter. The Zacks Consensus Estimate for admissions in the Acute Care Hospital indicates a 5% year-over-rise for the first quarter. Admissions in Behavioral Health Centers are also expected to have increased from the year-ago level.

Higher admissions are expected to have boosted Universal Health’s revenues. The consensus mark for net revenues at the Acute Care Hospital Services and Behavioral Health Care Services segments suggests a rise of 8.3% and 10%, respectively, from the corresponding year-ago reported figures.

While the Zacks Consensus Estimate for Behavioral Health Center hospitals owned and leased indicates no change from the year-ago level of 335 facilities, the same for Acute Care Hospitals indicates an increase by one facility.

While the factors mentioned above are expected to benefit Universal Health’s first-quarter results, certain headwinds were faced by the company, making an earnings beat uncertain. It 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. Also, the average length of stay at Acute Care Hospitals might have decreased from the year-ago level.

Earnings Whispers

Our proven 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 chances of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: The company’s Earnings ESP is -8.50%. This is because the Most Accurate Estimate currently stands at $2.26 per share, lower than the Zacks Consensus Estimate of $2.47.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Universal Health currently carries a Zacks Rank #3.

Stocks to Consider

While an earnings beat looks uncertain for Universal Health, here are some companies from the Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:

AngionBiomedica Corp. (ANGN - Free Report) has an Earnings ESP of +17.46% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AngionBiomedica’s bottom line for the to-be-reported quarter suggests an improvement of 50% year over year.

Cue Biopharma, Inc. (CUE - Free Report) has an Earnings ESP of +4.65% and is a Zacks #2 Ranked player.

The Zacks Consensus Estimate for Cue Biopharma’s earnings per share for the to-be-reported quarter has improved 12.2% in the past 30 days.

Aligos Therapeutics, Inc. (ALGS - Free Report) has an Earnings ESP of +4.55% and is a Zacks #2 Ranked player.

The Zacks Consensus Estimate for Aligos Therapeutics’ bottom line for the to-be-reported quarter suggests an improvement of 10.8% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.