What's in the Cards for Universal Health (UHS) in Q2 Earnings?
Universal Health Services, Inc. UHS is slated to report second-quarter 2023 results on Jul 25 after market close.
Q2 Estimates
The Zacks Consensus Estimate for Universal Health’s second-quarter earnings per share is pegged at $2.48, which indicates an improvement of 12.7% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $3,503 million, suggesting 5.4% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Universal Health’s bottom line beat estimates in each of the trailing four quarters, the average surprise being 5.62%. 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 second 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 UHS’s 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, an elevated physician expense is expected to have hurt the performance of the unit.
We expect the segment’s net revenues to be $1,941.3 million in the second quarter, which implies a rise of 3.5% year over year. Our estimate for same-facility adjusted admissions in acute care hospitals suggests 1.5% growth from the prior-year quarter’s 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 its behavioral health care services.
We estimate net revenues in the Behavioral Health Care Services unit to be $1,546.4 million in the second quarter, suggesting 7.8% growth from the prior-year quarter’s reported figure. Our estimate for same-facility adjusted admissions in behavioral health facilities hints toward a 5.4% year-over-year rise. We also expect adjusted patient days to improve 420 basis points year over year to 4.9%.
However, Universal Health’s 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 4.9% year over year, while our estimate for supplies expense suggests 9.5% 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, that’s not the case here as elaborated below.
Earnings ESP: Universal Health has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: UHS currently carries a Zacks Rank of 2.
Stocks to Consider
While an earnings beat looks uncertain for Universal Health, here are some companies from the Medical space, which according to our model, have the right combination of elements to beat on earnings this time around:
Jazz Pharmaceuticals plc JAZZ has an Earnings ESP of +0.45% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for JAZZ’s second-quarter 2023 earnings is pegged at $4.48 per share, indicating an improvement of 4.2% from the year-ago quarter’s reported figure.
The consensus mark for Jazz Pharmaceuticals’ second-quarter earnings has moved 0.2% north in the past 30 days.
Boston Scientific Corporation BSX has an Earnings ESP of +0.47% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for BSX’s second-quarter 2023 earnings is pegged at 49 cents per share, suggesting 11.4% growth from the year-ago quarter’s reported number.
Boston Scientific’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 1.88%.
Henry Schein, Inc. HSIC has an Earnings ESP of +0.62% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for HSIC’s second-quarter 2023 earnings is pegged at $1.25 per share, which implies a rise of 7.8% from the year-ago quarter’s reported figure.
Henry Schein’s earnings outpaced estimates in two of the trailing four quarters, matched the mark once and missed the same on the remaining one occasion, the average surprise being 0.51%.
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