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

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Universal Health Services, Inc. (UHS - Free Report) is set to report second-quarter 2017 results on Jul 25, after  market close.

Last quarter, the company pulled off a positive earnings surprise of 1.94%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Universal Health is likely to have witnessed a rise in revenue per adjusted patient day for its Behavioral Health division, continuing the previous quarter’s trend.

The company’s Acute Care division is expected to have delivered a decent performance on the back of adjusted admissions growth.

Universal Health Services, Inc. Price and EPS Surprise

Universal Health’s efforts to enhance shareholders’ value through share repurchases might have boosted its bottom-line by limiting share count.

Nevertheless increasing costs related to interest payment, reserves for settlements, legal judgments and lawsuits, and impairments of long-lived assets might have put pressure on margins.

Earnings Whispers

Our proven model does not conclusively show that Universal Health is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Universal Health has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.07. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Universal Health carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, we need a positive Earnings ESP to be confident about an earnings beat.

Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies from the medical sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

Align Technology, Inc. (ALGN - Free Report) , which is set to report second-quarter earnings on Jul 27, has an Earnings ESP of +1.37% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pfizer, Inc. (PFE - Free Report) has an Earnings ESP of +1.54% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 1.

Humana, Inc. (HUM - Free Report) has an Earnings ESP of +1.3% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 2.

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