Healthcare Stock Q2 Earnings Due On Jul 31: HUM, AMED & More
Zacks Investment Research | Jul 29, 2019 11:45PM ET
In second-quarter earnings season, the healthcare industry — comprising health insurers, hospitals, drug makers, etc. — is expected to reiterate its solid performance exhibited in the first three months of this year.
Increase in admission, membership and premium is ought to be the primary catalysts for the companies’ top-line growth in the second quarter. The leading industry players’ performances are also likely to see an uptick on the back of better operational efficiency and restructuring initiatives. A sturdy capital level supporting strategic mergers and acquisitions should also act as a key driver.
Factors to Influence Second-Quarter Earnings
The second-quarter reporting cycle for the industry should be mostly stable with higher enrollments in Medicare and Medicaid plans.
The Medicaid line of business is expected to have witnessed growth from expansion, outsourced by the government to private players. The Medicare lines of business are also well-poised for growth on the back of the surging baby boomer population.
Other factors, such as a hike in same-store patient volumes at home health, are likely to boost the bottom line of the companies. Higher patient visits and licensed beds are expected to contribute to the revenue streams of the industry participants.
The companies are also likely to see an upside owing to strategic alliances and acquisitions, which in turn, helped enhancing their capabilities and penetrating new regions.
Also, a sturdy capital level widens scope for effective capital deployment to fund growth initiatives as well as reward shareholders via dividend raises and share buybacks. This will certainly add an extra edge to the earnings.
However, the healthcare players anticipate a rise in the operating costs due to growth-related initiatives and investments in adapting technology.
The proven Zacks model clearly shows that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Zacks Investment Research
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