In just a few days, Universal Health Services, Inc. (UHS) is scheduled to release its third-quarter 2023 results on October 25th after the market closes. So, what can we expect from the healthcare company this quarter?
The consensus estimate for Universal Health’s third-quarter earnings per share is $2.34, which reflects a 7.9% decline from the same period last year. Meanwhile, analysts are projecting revenues of $3,530 million, indicating a 5.8% growth compared to the year-ago quarter.
Earnings Surprise History
Universal Health has consistently beaten earnings estimates in the past four quarters, with an average surprise of 4.7%. Take a look at the chart below to see the company’s performance:
Factors to Note
In Q3, Universal Health is expected to benefit from increased patient volumes and surgical procedures, contributing to the growth of its Acute Care Hospital Services and Behavioral Health Care Services segments. However, the Acute Care Hospital Services unit may face margin pressure due to higher physician expenses. On the other hand, the Behavioral Health Care Services segment is likely to see higher demand due to the growing incidence of mental health issues.
Our estimates suggest that net revenues for the Acute Care Hospital Services unit could reach $2 billion, indicating a 4.1% YoY increase, while net revenues for the Behavioral Health Care Services unit may reach $1.5 billion, suggesting a 5.1% YoY growth.
It’s worth noting that Universal Health’s margins may be impacted by higher salaries, wages, and benefits, as well as increased supplies expenses during the quarter.
What Our Quantitative Model Predicts
Although our quantitative model does not conclusively predict an earnings beat for Universal Health this time around, factors like positive earnings ESP and a favorable Zacks Rank typically increase the odds of an earnings beat. However, Universal Health currently has an Earnings ESP of -4.54% and a Zacks Rank of 3.
Stocks to Consider
If you’re looking for potential earnings beats in the medical sector, consider Apellis Pharmaceuticals, Inc. (APLS), AstraZeneca PLC (AZN), and Jazz Pharmaceuticals plc (JAZZ). Apellis has an Earnings ESP of +5.75%, AstraZeneca has an Earnings ESP of +5.13%, and Jazz Pharmaceuticals has an Earnings ESP of +1.31%.
To stay updated on upcoming earnings announcements, you can refer to the Zacks Earnings Calendar.
Remember, investing in the future is like investing in the power of automation. As Kevin Cook, Zacks Senior Stock Strategist, suggests, investing in innovative companies can lead to sky-high growth potential in sectors like Artificial Intelligence.
In conclusion, Universal Health is expected to face some challenges in Q3, but with strong performance in its Acute Care Hospital Services and Behavioral Health Care Services segments, the healthcare company may still surprise the market. Keep an eye on the upcoming earnings release to see how Universal Health performs.
Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.