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What's in Store for HCA Healthcare's (HCA) Q2 Earnings?

HCA Healthcare, Inc. HCA is scheduled to release second-quarter 2020 results on Jul 22. In the last reported quarter, the company reported adjusted earnings of $2.33 per share, missing the Zacks Consensus Estimate by 10.7%. Moreover, the bottom line declined 21.5% year over year due to lower patient volumes.

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

The company’s second-quarter bottom line is likely to have been affected by lower admissions.

The Zacks Consensus Estimate for loss in the quarter to be reported is pegged at 94 cents per share. Meanwhile, the company delivered earnings of $2.21 in the year-ago quarter.

The company’s top line is expected to have been impacted by the COVID-19 pandemic, which resulted in muted admissions and emergency room visits. Government regulations compelled hospitals to suspend certain operations, which might have weighed on their top line. The Zacks Consensus Estimate for HCA Healthcare’s revenues stands at $9.4 billion, suggesting a 25.4% drop from the prior-year reported number.

The Zacks Consensus Estimate for admissions and equivalent admissions hints at a respective downfall of 24.5% and 27% from the year-ago reported numbers, mainly due to the coronavirus outbreak.

Nonetheless, the consensus mark for the total number of hospitals implies a 1.1% improvement from the year-earlier reported figure.
However, with the easing of restrictions lately, the company might have witnessed better results in the last half of the second quarter.

The consensus estimate for second-quarter patient days indicates a 25% decline from the year-ago reported number.

The Zacks Consensus Estimate for the licensed number of beds is pegged at 49.4 million, implying a 1.8% improvement from the prior-year reported figure. This uptrend might have been boosted by the rising number of hospitals.

The consensus mark for occupancy stands at 39.6%, implying a rise from the average of 2.6% reported in second-quarter 2019.

However, the company might have slightly taken a hit from elevated expenses because of growth-related investments and operating costs.

What the Quantitative Model States

Our proven model doesn’t 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 a positive surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: HCA Healthcare has an Earnings ESP of +104.26%. This is because the Most Accurate Estimate is pegged at 4 cents against the Zacks Consensus Estimate of -94 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

HCA Healthcare, Inc. Price and EPS Surprise

HCA Healthcare, Inc. Price and EPS Surprise

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

Zacks Rank: HCA Healthcare currently has a Zacks Rank of #4 (Sell), which decreases the predictive power of ESP.

Stocks to Consider

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

Community Health Systems, Inc. CYH has an Earnings ESP of +5.17% and a Zacks Rank #3, currently. The company is set to report second-quarter earnings performance on Jul 28.

Universal Health Services, Inc. UHS has an Earnings ESP of +29.21%. This presently Zacks #3 Ranked company is set to report second-quarter earnings performance on Jul 23.

Anthem, Inc. ANTM is slated to release second-quarter financial figures on Jul 29. The stock has an Earnings ESP of +3.90% and a Zacks Rank #2 at present.

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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.

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