Zacks
Healthcare Q1 Earnings Slated on May 2: AET, HCA & More
Zacks Equity Research
Updated

We are past the halfway mark in the first-quarter earnings season, and earnings and revenue figures so far point at improvement from the past few quarters.

Per the latest Earnings Preview, total earnings for the 288 S&P 500 members, constituting 63.8% of the index’s total market capitalization, that have reported results (as of Apr 28) across all sectors, are up 13.7% from the year-ago period, driven by a 8.2% rise in revenues. Going by the scorecard, 76.4% companies delivered an earnings beat, while 6.1% surpassed revenue estimates.

Healthcare, under the Medical umbrella, is one of the seven sectors in the S&P 500 group. So far, 53.7% of the total Medical sector companies have reported first-quarter results. The beat ratio is strong with 93.1% companies surpassing bottom-line expectations and 79.3% outperforming on the revenue front.

The sector has been in the limelight since the change of power at the White House. President Donald Trump, who is keen to repeal and replace the Health Care Reform Act more popularly called Obamacare, has injected a fresh dose of uncertainty in the industry.

Trump's version of the policy called the American Health Care Act (AHCA) received a lukewarm response, and called for further amendments to the proposed bill. The proposed amendment calls for setting aside funds to be used in covering a portion of costs alongside insurers. This would invariably result in bringing down premium costs while accommodating more people under the healthcare umbrella.

Had the AHCA been passed in its original form (without the proposed amendment), around 6–10 million Americans might have lost coverage. This would invariably have resulted in shrinkage in the customer base for hospital companies as a chunk of the population would lose their healthcare coverage. If the amendment is enacted, it would be effective from Jan 1, 2018. Also, the roll back of Medicaid expansion would be against the interest of Medicaid centric companies.  

The ultimate impact on the fortunes of healthcare stocks will depend on the final shape that the law takes.

Let’s take a sneak peek into earnings of these players slated for release on May 2.

Aetna Inc. AET has an Earnings ESP of -0.42% as the Most Accurate estimate of $2.35 is below the Zacks Consensus Estimate of $2.36. Though the company has a Zacks Rank #3 (Hold), its negative ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Last quarter, Aetna beat the Zacks Consensus Estimate by 12.41%. This time, however, the company is unlikely to come up with a beat.

Terms and Privacy Policy
Your Privacy Choices
Utah Privacy Notice
More Info

Recommended Stories