HCA Healthcare, Inc. HCA is set to report its fourth-quarter 2022 results on Jan 27, before the opening bell.
In the last reported quarter, the company’s adjusted earnings per share of $3.93 beat the Zacks Consensus Estimate by 1%. Though its Florida facilities suffered a headwind due to Hurricane Ian, an increase in same-facility equivalent admissions in its other U.S. facilities and a slight dip in overall expenses provided some respite to HCA’s results.
Let’s see how things have shaped up before the fourth-quarter earnings announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share of $4.76 suggests a 7.7% increase from the prior-year reported figure of $4.42, whereas our estimate suggests 10.5% year-over-year growth. The consensus mark has been unchanged over the past week. The consensus estimate for fourth-quarter revenues of $15.5 billion indicates a 3% increase from the year-ago reported figure, while our estimate suggests 1.4% year-over-year growth.
HCA Healthcare beat the consensus estimate for earnings in two of the prior four quarters and missed on two occasions, with the average being 2.3%. This is depicted in the graph below:
HCA Healthcare, Inc. Price and EPS Surprise
HCA Healthcare, Inc. price-eps-surprise | HCA Healthcare, Inc. Quote
Factors to Note
In the fourth quarter, HCA Healthcare’s revenues are expected to have gained on improved patient volumes. The Zacks Consensus Estimate for equivalent admissions hints at a 4.8% rise from the prior-year quarter’s reported figure. Our estimate for the metric suggests 6.3% growth from the prior-year quarter’s reported number.
The consensus mark for equivalent patient days indicates a 0.7% year-over-year increase, whereas our estimate suggests a 0.4% jump. This is likely to have positioned the company for year-over-year growth in profit levels. The consensus mark and our estimate for the total number of hospitals are both pegged at 183, up from 182 reported a year ago.
The consensus mark and our estimate for the occupancy rate are both pegged at 70% for the fourth quarter. Similarly, the consensus mark and our estimate for outpatient surgery cases both indicate 2.8% year-over-year growth.
However, the consensus mark and our estimate for inpatient surgery cases both indicate a 0.6% year-over-year decrease. The bottom line of HCA Healthcare is expected to have suffered from continued labor challenges, an issue that has been plaguing the industry for quite some time.
Another potential constraint affecting the whole nation is the persistent inflationary impact on expenses that is likely to have dampened HCA's margins in the to-be-reported quarter.
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’s Earnings ESP is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $4.76 per share.
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 #3.
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:
Haemonetics Corporation HAE has an Earnings ESP of +2.53% and currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Haemonetics’s bottom line for the to-be-reported quarter is pegged at 79 cents per share. It has witnessed one upward estimate revision in the past 30 days against none in the opposite direction. HAE beat earnings estimates in each of the past four quarters, the average surprise being 12.1%.
Ardelyx, Inc. ARDX has an Earnings ESP of +140.00% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Ardelyx’s earnings per share for the to-be-reported quarter indicates a 103.2% year-over-year improvement. ARDX witnessed one upward estimate revision in the past 30 days against none in the opposite direction.
ImmunoGen, Inc. IMGN has an Earnings ESP of +11.36% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for ImmunoGen’s bottom line for the to-be-reported quarter has been unchanged over the past week. IMGN beat earnings estimates in two of the past four quarters and missed on the other occasions, the average surprise being 7.4%.
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