U.S. Markets open in 16 mins

Tenet Healthcare (THC) to Post Q1 Earnings: What's in Store?

Zacks Equity Research

Tenet Healthcare Corporation THC will report first-quarter 2019 results on Apr 29 after market close. In the last reported quarter, the company delivered a positive surprise of 112.5%. However, the bottom line plunged 63.6% year over year, mainly due to weak operating revenues.

Let’s see how things are shaping up prior to this announcement:

In the to-be-reported quarter, the company’s performance is likely to suffer a decline in revenues due to reduced admissions, inpatient and outpatient surgeries, emergency department visits and total outpatient visits.

Weak performances by its segments, namely Conifer and Hospital operations plus other segments might also negatively impact its revenue stream. Conifer’s bottom line is likely to be hurt by hospital divestitures.

The Zacks Consensus Estimate for the company’s total revenues in the to-be reported quarter stands at $4.5 billion, indicating 40.6% fall from the year-ago reported figure.

The Zacks Consensus Estimate for the stock’s earnings is pegged at 30 cents, suggesting 47.4% decrease from the prior-year reported number. The metric is likely to be affected in the upcoming quarterly results due to lower revenues.

However, overdependence on debt to fund the growth-related investments raises the financial risk for Tenet Healthcare.

What the Quantitative Model States

Our proven model does not conclusively show that Tenet Healthcare is likely to beat on earnings this to-be-reported quarter. This is because the stock has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen, which is not the case here.

Earnings ESP: Tenet Healthcare has an Earnings ESP of -10.89%. This is because the Most Accurate Estimate is pegged at 27 cents, lower than the Zacks Consensus Estimate of 30 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Tenet Healthcare Corporation Price and EPS Surprise

Tenet Healthcare Corporation Price and EPS Surprise | Tenet Healthcare Corporation Quote

Zacks Rank: Tenet Healthcare carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s negative ESP in the combination leaves surprise prediction inconclusive for the stock this reporting cycle.

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

Stocks to Consider

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

Aduro Biotech, Inc. ADRO is slated to release third-quarter earnings figures on May 1. This stock has an Earnings ESP of +82.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

bluebird bio, Inc. BLUE has an Earnings ESP of +12.12%. This #3 Ranked company is set to report third-quarter earnings on May 1.

Humana Inc. HUM is set to report first-quarter 2018 earnings performance on May 1. The stock has an Earnings ESP of +0.84% and a Zacks Rank of 3.

Radical New Technology Creates $12.3 Trillion Opportunity

Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.

Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.

See the 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
bluebird bio, Inc. (BLUE) : Free Stock Analysis Report
Aduro Biotech, Inc. (ADRO) : Free Stock Analysis Report
Humana Inc. (HUM) : Free Stock Analysis Report
Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research