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Healthcare Earnings Scheduled on Jul 26: CNC, ICLR, UHS

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The second-quarter earnings season is set to pick up steam this week (Jul 25-29) with more than 189 S&P 500 companies set to report their quarterly figures. We note that 126 S&P companies have disclosed their numbers so far, with 70.6% of them having beaten EPS estimates and 55.6% managed to clock a revenue beat.

As per the latest Earnings Trends report, overall second-quarter earnings for S&P 500 companies is expected to be down 3.4% (slightly better than the earlier estimated decline of 5.4%) from the year-ago quarter, and on revenues that are estimated to decline 0.5%.

Medical is one of the seven sectors in the S&P 500 cohort that is expected to register earnings growth in the second quarter. The sector is estimated to report earnings growth of 1.8% on revenue improvement of 7.7%.

Healthcare is an important component of the Medical sector and is expected follow the same earnings growth trajectory in the quarter. Here, we take a look at three Healthcare companies to report earnings on Jul 26:

Centene Corporation (CNC - Free Report) provides managed care programs, and related services, to individuals. We expect Centene to beat second quarter earnings as it has a favorable combination of Zacks Rank #2 and +1.85% Earnings ESP.
 

CENTENE CORP Price and EPS Surprise

CENTENE CORP Price and EPS Surprise | CENTENE CORP Quote

This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) to beat earnings. Simultaneously, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

ICON Plc (ICLR - Free Report) is a global contract research organization (CRO). Its plus points are an increasing backlog and strong funds flow from mid-sized companies that are expected to drive the company’s results. We believe the company is poised to gain market position due to its continuing investments in ICONIK, ADDPLAN and Firecrest platforms.
 

ICON PLC Price and EPS Surprise

ICON PLC Price and EPS Surprise | ICON PLC Quote

Moreover, strategic partnerships with the likes of International Consortium for Health Outcomes Measurement (ICHOM), IBM Watson and Genomics England are key catalysts.

However, our proven model does not conclusively show that the company is likely to beat on earnings, given the combination of a Zacks Rank #3 and an Earnings ESP of 0.00%.

We also note that ICON results compared favorably with the Zacks Consensus Estimate in the last four quarters, with an average beat of 2.09%.

Universal Health Services Inc (UHS - Free Report) owns and operates (through its subsidiaries) acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers.
 

UNIVL HLTH SVCS Price and EPS Surprise

UNIVL HLTH SVCS Price and EPS Surprise | UNIVL HLTH SVCS Quote

Universal Health continues to benefit from higher number of Medicaid and Medicare patients, which lowers uncompensated charges and, thereby, drives top-line growth. Moreover, it stands to gain from accretive acquisitions presenting significant growth opportunities in the behavioral market.

However, our proven model does not conclusively show that the company is likely to beat earnings, given the combination of a Zacks Rank #3 and Earnings ESP of -1.03%.

We also note that Universal Health results compared favorably with the Zacks Consensus Estimate in the last four quarters, with an average beat of 3.56%.

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