Is there a hit to HCA Healthcare’s (HCA) fourth quarter earnings?

This story originally appeared on Zacks

HCA Healthcare, Inc. HCA is scheduled to release fourth quarter 2021 results on January 27, before the market opens.
HCA’s third quarter 2021 adjusted earnings of $4.57 per share beat the Zacks Consensus Estimate of $4.10 by 11.5%. The bottom line also improved 138% year over year due to higher revenues.
Witnessed strong patient volumes in the quarter.

-Zacks

History of profit surprises

HCA has an encouraging record of earnings surprises. The final result exceeded estimates in the last four quarters, with an average of 21.67%. This is represented in the following table:
This is what our quantitative model predicts:

Factors to consider

In the reporting quarter, HCA is expected to have seen increased patient volume, which is likely to contribute to its revenue. The consensus mark for the same stands at $15.41 billion, indicating an increase of 7.8% over the reported figure for the prior year quarter.
Other factors helping their top line are increased inpatient admissions, outpatient surgeries, etc.
HCA Healthcare is likely to have benefited from an improved payer mix from its commercial business in the fourth quarter of 2021.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $4.55, indicating a 10.2% increase from the reported year-ago quarter figure. This advantage is likely to have been supported by better earnings.
The increased number of HCA outpatient facilities may have provided a boost to patient admissions in the reporting quarter. The Zacks Consensus Estimate for admissions implies a 6.3% improvement over the reported figure for the prior year period.
HCA Healthcare has likely continued its dividend payment and share buyback plan, both of which resumed earlier this year. This could have given an extra cushion to his performance.
The consensus estimate for fourth quarter patient days suggests a 6.4% increase over the actual data for the prior year quarter.
HCA’s performance has likely suffered from high expenses due to higher operating costs and substantial investments related to growth.

What our quantitative model predicts

Our tested model predicts an increase in earnings for HCA Healthcare this time. The combination of a positive profit ESP and a Zacks rank #1 (buy strong), 2 (buy) or 3 (hold) increases the odds of winnings outperforming, as you can see below.
ESP Earnings: HCA Healthcare has an earnings ESP of +1.07%. This is because the most accurate estimate of $4.60 is set higher than the Zacks Consensus Estimate of $4.55. You can discover the best stocks to buy or sell before they are reported with our earnings ESP filter.
Zacks Rank: HCA Healthcare currently has a Zacks #3 rank. You can see the full list of today’s Zacks #1 rank stocks here.

Other actions to consider

Here are some other medical stocks worth considering with the perfect mix of elements to beat estimates in their upcoming releases:
Bausch Health Companies Inc. BHC has a Win ESP of +3.24% and a Zacks Rank of 3, currently.
Community Health Systems, Inc. CYH has a Winning ESP of +23.00% and is currently the 2nd ranked player.
Blue Bird Bio, Inc. BLUE has a +26.20% Earning ESP and is currently ranked #3 by Zacks.
Stay on top of upcoming earnings announcements with the Zacks earnings calendar.

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