What's in the Cards for Universal Health (UHS) in Q3 Earnings?
Universal Health Services, Inc. UHS is slated to report third-quarter 2023 results on Oct 25, after market close.
Q3 Estimates
The Zacks Consensus Estimate for Universal Healthās third-quarter earnings per share is pegged at $2.34, which indicates a deterioration of 7.9% from the prior-year quarterās reported figure.
The consensus mark for revenues is pegged at $3,530 million, suggesting 5.8% growth from the year-ago quarterās reported number.
Earnings Surprise History
Universal Healthās bottom line beat estimates in each of the trailing four quarters, the average surprise being 4.7%. This is depicted in the chart below:
Universal Health Services, Inc. Price and EPS Surprise
Universal Health Services, Inc. price-eps-surprise | Universal Health Services, Inc. Quote
Factors to Note
In the third quarter, the top line of Universal Health is likely to have gained from growing patient volumes and increased surgical procedures. Strong contributions from the Acute Care Hospital Services and Behavioral Health Care Services segments are expected to have provided an impetus to UHSās quarterly performance.
Results of the Acute Care Hospital Services unit are expected to have benefited on the back of sustained demand for its services, which, in turn, are likely to have attracted more customers and led to an increase in admissions. However, elevated physician expenses are expected to have hurt the performance of the unit.
We expect the segmentās net revenues to be $2 billion in the third quarter, which implies a rise of 4.1% year over year. Our estimate for same-facility adjusted admissions in acute care hospitals suggests 3.8% growth from the prior-year quarterās reported figure.
The Behavioral Health Care Services segment is likely to have been aided by higher adjusted patient days in the to-be-reported quarter. The growing incidence of mental health issues among Americans is expected to have sustained the solid demand for Behavioral Health Care Services.
We estimate net revenues in the Behavioral Health Care Services unit to be $1.5 billion in the third quarter, suggesting 5.1% growth from the prior-year quarterās reported figure. Our estimate for same-facility adjusted admissions in behavioral health facilities hints toward a 0.9% year-over-year rise.
However, Universal Healthās margins are expected to have taken a hit from higher salaries, wages and benefits coupled with increased supplies expenses in the to-be-reported quarter. We expect salaries, wages and benefits to increase 6% year over year, while our estimate for supplies expense suggests 6.1% year-over-year growth.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Universal Health this time around. 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. However, thatās not the case here, as elaborated below.
Earnings ESP: Universal Health has an Earnings ESP of -4.54%. You can uncover the best stocks before theyāre reported with our Earnings ESP Filter.
Zacks Rank: UHS currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for Universal Health, 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:
Apellis Pharmaceuticals, Inc. APLS has an Earnings ESP of +5.75% and is a Zacks #2 Ranked player. You can see the complete list of todayās Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Apellisā earnings per share for the to-be-reported quarter indicates a 49.7% year-over-year improvement. APLS beat earnings estimates twice in the past four quarters and missed on two occasions, the average surprise being 1.4%.
AstraZeneca PLC AZN has an Earnings ESP of +5.13% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZenecaās bottom line for the to-be-reported quarter is pegged at 82 cents per share, which improved 3.8% in the past 30 days. AZN beat earnings estimates in all the past four quarters, the average surprise being 8.4%.
Jazz Pharmaceuticals plc JAZZ has an Earnings ESP of +1.31% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Jazz Pharmaceuticalsā bottom line for the to-be-reported quarter has improved 0.8% in the past 60 days. The consensus mark for JAZZās revenues is pegged at $970.5 million, signaling 3.2% year-over-year growth.
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AstraZeneca PLC (AZN) : Free Stock Analysis Report
Universal Health Services, Inc. (UHS) : Free Stock Analysis Report
Jazz Pharmaceuticals PLC (JAZZ) : Free Stock Analysis Report
Apellis Pharmaceuticals, Inc. (APLS) : Free Stock Analysis Report
