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Universal Health Services (UHS) Q3 Earnings: A Beat in the Cards?

Universal Health Services, Inc.UHS is set to report third-quarter 2018 results on Oct 25 after market close. Last reported quarter, the company came up with a earnings surprise of 3.35%.

The Zacks Consensus Estimate for earnings is pegged at $2, up 21.9% year over year.

So, let's see how things are shaping up for this announcement:

The company's growth has likely been fueled by solid performances at both its Acute Care and Behavioral Health segments, which have been delivering strong results over the past many quarters. In third-quarter 2018, the segments are expected to gain from higher admissions, licensed beds as well as patient days.

The Zacks Consensus Estimate for total revenues in the third quarter is pegged at $2.7 billion, reflecting year-over-year growth of 5.5%. The consensus estimate for net revenues at Acute Care and Behavioral Health segments stands at $1.4 billion and $1.2 billion, respectively, up by 5% and 3.8% each, year over year.

The average number of licensed beds in the Acute Care hospitals as well as in the Behavioral Health centers has been steadily increasing since 2012. The consensus mark for Average Licensed Beds in Acute Care and Behavioral Health on same facility basis is pegged at 6.4 billion and 23.3 billion each, up by a respective 6.4% and 6.7%, year over year.

The increasing bed count is likely to aid admissions in both Acute Care and Behavioral Health segments during the third quarter. The estimate for admissions at Behavioral Health Centers on the same facility basis stands at 119 billion, up 3.4% year over year. Similarly, the same for Acute Care admissions is pegged at 76 million, up 3.7% year over year.

The company is expected to have consistently enhanced its shareholder value in the to-be-reported quarter. However, it has likely faced escalating expenses related to the company's personnel General and Administrative, which can have a negative impact on third-quarter earnings.

What the Quantitative Model States

Our proven model conclusively shows that Universal Health is likely to beat on earnings this to-be-reported quarter. This is because the stock has the right mix of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to this end.

Earnings ESP: Universal Health has an Earnings ESP of +1.63%, indicative of a likely positive surprise. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter .

Universal Health Services, Inc. Price and EPS Surprise

Universal Health Services, Inc. Price and EPS Surprise | Universal Health Services, Inc. Quote

Zacks Rank: Universal Health carries a Zacks Rank #3, which increases the predictive power of ESP. Thus, with this combination, the chances of beating estimates seem significantly higher for the stock.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

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

Allergan plc AGN is set to report third-quarter 2018 earnings performance on Oct 30. The stock has an Earnings ESP of +2.89% and a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here .

Anthem, Inc. ANTM is slated to release third-quarter earnings figures on Oct 31. This stock has an Earnings ESP of +1.21% and a Zacks Rank #2.

Molina Healthcare, Inc MOH has an Earnings ESP of +4.82%. This #1 Ranked company is scheduled to announce third-quarter financial numbers on Oct 31.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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