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Genesis Healthcare (GEN) to Post Q3 Earnings: What to Expect

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Genesis Healthcare, Inc. (GEN - Free Report) will release third-quarter 2019 financial results on Nov 7, before the market opens.

The Zacks Consensus Estimate for the company’s third-quarter results is pegged at a loss of 10 cents, narrower than the year-earlier quarter’s loss of 32 cents.  

In the last reported quarter, the company delivered adjusted operating loss of 5 cents, narrower than the Zacks Consensus Estimate of 13 cents and also the year-ago quarter’s loss of 17 cents.

Q3 Catalysts

Revenues of the company have been decreasing over the last few quarters due to its divestment of certain businesses. It has been disposing challenging facilities and exiting some low-density markets in order to focus on core, strategic markets. The weak top line has most likely continued in the third quarter as well. The consensus mark for revenues stands at $1.13 billion, implying a 7.1% decline from the year-ago reported figure.

However, the company is expected to have seen growth in same-store average daily patients on the back of improving operating trends and business portfolio optimization strategy. Also, stable cost management, improvement in the company’s therapy and staffing businesses and steady streamlining of its profile are some probable key tailwinds.

In the to-be-reported quarter, the company is expected to have reduced expenses owing to expense management and decrease in lease rental payments related to sell-offs and closure. In 2017 and 2018, the company completed 30 and 54 divestitures of facilities, respectively. In the first six months of 2019, it got rid of 31 inpatient operations.

The company is expected to have deleveraged its balance sheet with the proceeds from multiple business sales.

Earnings Surprise History

Although the company’s earnings surpassed estimates in three of the last four quarters, it came up with the average negative surprise of 12.57%.

What the Quantitative Model States

Our proven model does not conclusively predict an earnings beat for Genesis Healthcare this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Genesis Healthcare has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 10 cents.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Genesis Healthcare, Inc. Price and EPS Surprise

Genesis Healthcare, Inc. Price and EPS Surprise

Genesis Healthcare, Inc. price-eps-surprise | Genesis Healthcare, Inc. Quote

Zacks Rank: Genesis Healthcare carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult for the stock this time around.

Stocks to Consider

Some stocks worth considering from the medical sector with the perfect mix of elements to beat estimates in the next releases are as follows:

Cambrex Corporation (CBM - Free Report) is set to report third-quarter earnings on Nov 14. The stock has a Zacks Rank #3 and an Earnings ESP of +7.87%.

NGM Biopharmaceuticals, Inc. (NGM - Free Report) is slated to announce third-quarter earnings on Nov 11. The stock has an Earnings ESP of +3.85% and is Zacks #2 Ranked.

Aurora Cannabis Inc. (ACB - Free Report) is set to report third-quarter earnings on Nov 11. It has a Zacks Rank of 3 and an Earnings ESP of +25.76%.

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