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Can Higher Costs Affect HCA Healthcare's (HCA) Q4 Earnings?
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HCA Healthcare, Inc. (HCA - Free Report) is set to report its fourth-quarter 2023 results on Jan 30, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share of $5.02 suggests an 8.2% increase from the prior-year figure of $4.64. The consensus mark remained stable over the past week. Also, the consensus estimate for fourth-quarter revenues of $16.6 billion indicates a 6.8% increase from the year-ago reported figure.
HCA Healthcare beat the consensus estimate for earnings in two of the prior four quarters and missed twice, with the average surprise being 4.8%. This is depicted in the graph below:
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q3 Earnings Rewind
In the last reported quarter, the hospital company’s adjusted earnings per share of $3.91 missed the Zacks Consensus Estimate by 1.5%. The results suffered a blow due to an elevated expense level and the soft performance of the Valesco physician staffing joint venture. However, the downside was partly offset by growing patient admissions and a higher number of surgeries.
In the fourth quarter, HCA Healthcare's revenues are expected to have increased on higher patient volumes, driven by the resumption of elective procedures among seniors previously delayed by pandemic restrictions. This is likely to have resulted in increased occupancy rates and related metrics for HCA.
The Zacks Consensus Estimate for equivalent admissions indicates a 3.6% rise from the prior-year quarter’s reported figure, whereas our estimate suggests a 3.2% gain. The consensus mark and our estimate for emergency room visits suggest a 1% year-over-year increase in the fourth quarter. Similarly, the consensus estimate and our model predict the total number of hospitals to have increased to 183 in the to-be-reported quarter.
The Zacks Consensus Estimate and our estimate for outpatient surgery cases suggest 1.6% year-over-year growth in the quarter under review. The consensus estimate for revenues per equivalent admission indicates a 3.4% increase from a year ago. The consensus mark and our estimate for inpatient surgery cases suggest 1.2% year-over-year growth.
Furthermore, both our estimate and the consensus estimate for the occupancy rate are pegged at 72.1% for the fourth quarter, indicating a marginal increase from the year-ago level of 72%. The above-mentioned factors are likely to have positioned the company for year-over-year growth. However, with increased occupancy levels, HCA’s costs and expenses are expected to have increased in the fourth quarter, partially offsetting the upside.
Our estimate for total operating expenses suggests a nearly 6% year-over-year increase due to higher supplies, other operating expenses and salaries and benefits costs, affecting profit growth levels, making an earnings beat uncertain.
We expect salaries and benefits to have increased nearly 5% year over year in the quarter under discussion. Also, the Zacks Consensus Estimate and our model suggest the average length of stay to have declined nearly 4% year over year in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for HCA Healthcare 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 has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at $5.02 per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HCA Healthcare currently carries a Zacks Rank #2.
Stocks to Consider
While an earnings beat looks uncertain for HCA Healthcare, here are some companies from the broader 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:
The Zacks Consensus Estimate for GoodRx’s bottom line for the to-be-reported quarter is pegged at 7 cents per share, which has remained stable over the past week. The consensus mark for GDRX’s revenues is pegged at $192.7 million, signaling 4.6% year-over-year growth.
Globus Medical, Inc. (GMED - Free Report) has an Earnings ESP of +1.14% and a Zacks Rank #3.
The Zacks Consensus Estimate for Globus Medical’s bottom line for the to-be-reported quarter is pegged at 58 cents per share, which has witnessed three upward revisions over the past month against none in the opposite direction. GMED beat earnings estimates in each of the past four quarters, with an average surprise of 5.4%.
Arvinas, Inc. (ARVN - Free Report) has an Earnings ESP of +17.19% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Arvinas’ earnings per share for the to-be-reported quarter indicates an 18% year-over-year improvement. ARVN beat earnings estimates in two of the past four quarters and missed on the other occasions.
Image: Bigstock
Can Higher Costs Affect HCA Healthcare's (HCA) Q4 Earnings?
HCA Healthcare, Inc. (HCA - Free Report) is set to report its fourth-quarter 2023 results on Jan 30, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share of $5.02 suggests an 8.2% increase from the prior-year figure of $4.64. The consensus mark remained stable over the past week. Also, the consensus estimate for fourth-quarter revenues of $16.6 billion indicates a 6.8% increase from the year-ago reported figure.
HCA Healthcare beat the consensus estimate for earnings in two of the prior four quarters and missed twice, with the average surprise being 4.8%. This is depicted in the graph below:
HCA Healthcare, Inc. Price and EPS Surprise
HCA Healthcare, Inc. price-eps-surprise | HCA Healthcare, Inc. Quote
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q3 Earnings Rewind
In the last reported quarter, the hospital company’s adjusted earnings per share of $3.91 missed the Zacks Consensus Estimate by 1.5%. The results suffered a blow due to an elevated expense level and the soft performance of the Valesco physician staffing joint venture. However, the downside was partly offset by growing patient admissions and a higher number of surgeries.
Now, let’s see how things have shaped up before the fourth-quarter earnings announcement.
Q4 Factors to Note
In the fourth quarter, HCA Healthcare's revenues are expected to have increased on higher patient volumes, driven by the resumption of elective procedures among seniors previously delayed by pandemic restrictions. This is likely to have resulted in increased occupancy rates and related metrics for HCA.
The Zacks Consensus Estimate for equivalent admissions indicates a 3.6% rise from the prior-year quarter’s reported figure, whereas our estimate suggests a 3.2% gain. The consensus mark and our estimate for emergency room visits suggest a 1% year-over-year increase in the fourth quarter. Similarly, the consensus estimate and our model predict the total number of hospitals to have increased to 183 in the to-be-reported quarter.
The Zacks Consensus Estimate and our estimate for outpatient surgery cases suggest 1.6% year-over-year growth in the quarter under review. The consensus estimate for revenues per equivalent admission indicates a 3.4% increase from a year ago. The consensus mark and our estimate for inpatient surgery cases suggest 1.2% year-over-year growth.
Furthermore, both our estimate and the consensus estimate for the occupancy rate are pegged at 72.1% for the fourth quarter, indicating a marginal increase from the year-ago level of 72%. The above-mentioned factors are likely to have positioned the company for year-over-year growth. However, with increased occupancy levels, HCA’s costs and expenses are expected to have increased in the fourth quarter, partially offsetting the upside.
Our estimate for total operating expenses suggests a nearly 6% year-over-year increase due to higher supplies, other operating expenses and salaries and benefits costs, affecting profit growth levels, making an earnings beat uncertain.
We expect salaries and benefits to have increased nearly 5% year over year in the quarter under discussion. Also, the Zacks Consensus Estimate and our model suggest the average length of stay to have declined nearly 4% year over year in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for HCA Healthcare 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 has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at $5.02 per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: HCA Healthcare currently carries a Zacks Rank #2.
Stocks to Consider
While an earnings beat looks uncertain for HCA Healthcare, here are some companies from the broader 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:
GoodRx Holdings, Inc. (GDRX - Free Report) has an Earnings ESP of +39.53% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GoodRx’s bottom line for the to-be-reported quarter is pegged at 7 cents per share, which has remained stable over the past week. The consensus mark for GDRX’s revenues is pegged at $192.7 million, signaling 4.6% year-over-year growth.
Globus Medical, Inc. (GMED - Free Report) has an Earnings ESP of +1.14% and a Zacks Rank #3.
The Zacks Consensus Estimate for Globus Medical’s bottom line for the to-be-reported quarter is pegged at 58 cents per share, which has witnessed three upward revisions over the past month against none in the opposite direction. GMED beat earnings estimates in each of the past four quarters, with an average surprise of 5.4%.
Arvinas, Inc. (ARVN - Free Report) has an Earnings ESP of +17.19% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Arvinas’ earnings per share for the to-be-reported quarter indicates an 18% year-over-year improvement. ARVN beat earnings estimates in two of the past four quarters and missed on the other occasions.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.