Markets
BHC

What's in the Cards for HCA Healthcare (HCA) in Q3 Earnings?

HCA Healthcare, Inc.HCA is scheduled to release third-quarter 2018 results on Oct 30. Last reported quarter, the company delivered a positive earnings surprise of nearly 7.01%.

The Zacks Consensus Estimate for the company's earnings in the quarter to be reported is likely to be $1.93, up by a soaring 60% year over year.

The company has likely witnessed an increase in revenues during the third quarter, continuing with the trend over the past few quarters. It is expected to have been driven by higher facility admissions and equivalent admissions. The Zacks Consensus Estimate for the company's third-quarter top line is pegged at $11.2 billion, up 5.4% from the year-ago period.

The Zacks Consensus Estimate for total number of hospitals is pegged at 179, up from 177 in the year-ago period. This in turn, is anticipated to boost admission volume as well. HCA Healthcare has witnessed a rise in same-facility admissions for 17 consecutive quarters and the momentum is likely to be consistent. The consensus mark for the same stands at 493 million, up 5.6% year over year.

The estimate for patient days is also up by 2.3% from the year-ago period.

Lower tax rates owing to the Tax Cuts and Jobs Act might have decreased the company's tax burden, aiding its bottom line in turn.

However, the company's margins are expected to be weighed on by escalating expenses due to its constant investments in several sectors.

What the Quantitative Model States

Our proven model does not conclusively show that HCA Healthcare is likely to beat on earnings this to-be-reported quarter. This is because the stock needs to have the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you can see below.

Earnings ESP: HCA Healthcare has an Earnings ESP of -4.62%. This is because the Most Accurate Estimate is pegged at $1.84, lower than the Zacks Consensus Estimate of $1.93. 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. Quote

Zacks Rank: HCA Healthcare carries a Zacks Rank #2, which increases the predictive power of ESP. However, a stock also needs to have a positive ESP to be confident about a likely earnings surprise. Therefore, this combination leaves surprise prediction inconclusive.

We caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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

Amgen Inc. AMGN is set to report third-quarter 2018 earnings figures on Nov 6. The stock has an Earnings ESP of +5.88 % and a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here .

Humana Inc. HUM is set to report third-quarter 2018 earnings performance on Nov 7. The stock has an Earnings ESP of +2.22% and is a Zacks #2 Ranked player.

Bausch Health Cos Inc. BHC has an Earnings ESP of +6.15%. This #1 Ranked company is set to release third-quarter financial numbers on Nov 6.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Amgen Inc. (AMGN): Free Stock Analysis Report

Humana Inc. (HUM): Free Stock Analysis Report

HCA Healthcare, Inc. (HCA): Free Stock Analysis Report

Bausch Health Cos Inc. (BHC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

BHC HCA HUM AMGN

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More