HCA Healthcare (HCA) to Report Q3 Earnings: What's in Store?

HCA Healthcare, Inc. HCA is scheduled to release third-quarter 2020 results on Oct 26. In the second quarter, the company had reported adjusted earnings of $1.50 per share, against the Zacks Consensus Estimate of a loss of 94 cents. However, the bottom line declined 32.1% year over year due to lower patient admissions.

Factors to Note

The company’s third-quarter top line is expected to have benefited from gradual rise in patient volumes and resumption of non-emergent procedures following the easing of restrictions imposed by the government to curb the COVID-19 spread. The Zacks Consensus Estimate for HCA Healthcare’s revenues stands at $12.8 billion, suggesting growth of 0.9% from the prior-year quarter.

There are a number of the company’s outpatient facilities, which have started operating once again. This, in turn, is likely to have provided a boost to patient admissions in the to-be-reported quarter. While the Zacks Consensus Estimate for admissions indicates an improvement of 4% from the year-ago reported figure, the same for equivalent admissions suggests a decline of 2.6% year over year.

The company’s cost-cutting efforts are likely to have led to a decline in salaries and benefits, supplies and other operating expenses, which in turn, might have benefited the company’s performance in the quarter to be reported. The Zacks Consensus Estimate for earnings per share in the third quarter is pegged at $2.69 per share. This figure indicates year-over-year improvement of 20.6% from the prior-year quarter.

Nonetheless, the consensus mark for the total number of hospitals suggests an improvement of 1.1% from the year-earlier reported figure.

The consensus estimate for third-quarter patient days indicates a rise of 5.8% from the year-ago quarter.

The consensus mark for occupancy stands at 54%, indicating a decline from the average of 57% in third-quarter 2019.

Despite several cost-cutting efforts, the company’s third-quarter performance is likely to have suffered from elevated expenses owing to operating costs and substantial growth-related investments. 

HCA Healthcare, Inc. Price and EPS Surprise

HCA Healthcare, Inc. Price and EPS Surprise

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

What Our Quantitative Model Predicts

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 odds of an earnings beat. But that’s not the case here.

Earnings ESP: HCA Healthcare has an Earnings ESP of -25.71%. This is because the Most Accurate Estimate of $1.93 is pegged lower than the Zacks Consensus Estimate of $2.59. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: HCA Healthcare carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Some stocks worth considering from the medical sector with the perfect mix of elements to surpass estimates in their upcoming releases.

Horizon Therapeutics Public Limited Company HZNP has an Earnings ESP of +5.58% and a Zacks Rank of 2, at present. The company is slated to announce third-quarter 2020 earnings on Nov 2.

Teladoc Health, Inc. TDOC has an Earnings ESP of +9.77% and a Zacks Rank #3. The company is scheduled to release third-quarter 2020 earnings on Oct 28.

Alexion Pharmaceuticals, Inc. ALXN has an Earnings ESP of +0.84% and a Zacks Rank #3. The company is scheduled to release third-quarter 2020 earnings on Oct 29.

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