Healthcare Stock Q3 Earnings Due on Oct 29: NVCR, CRL & More

Zacks Equity Research
·7-min read

The healthcare sector is one of the integral constituent of the U.S. economy and currently gained all the more prominence as the world is looking for a cure to contain the contagious coronavirus.  

Amid the pandemic-led market volatility, healthcare companies have hitherto shown more resilience than many other entities.

The healthcare industry belongs to the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Earnings picture indicates that the sector has shown better survival strength so far than other industries amid the COVID-19-induced weak economic environment. Players in this space are showing improved signs of recovery from the last reported quarter.

Medical is one of the six among the 16 major Zacks sectors, which has reported year-over-year revenue rise and one of the nine to have delivered year-over-year earnings growth so far this reporting cycle. Going by the latest Earnings Preview,, this sector’s scorecard has reflected 5.4% earnings growth to date on a 5.1% upside in revenues. Overall, earnings are projected to increase 5.1% (4.7% uptick was reported in the June quarter) on an expected 9.1% revenue improvement (growth of 2.7% was recorded in the second quarter).

Notably, healthcare companies were able to serve patients well by appropriately investing in virtual physician education and remote clinical support. This, in turn, also drove revenues.

Specifically speaking about the hospital companies, suspension of elective procedures dragged down the patient admissions, eating into revenues.

Health insurance participants are likely to have experienced a negative impact in moderation of the care deferral which was experienced in the second quarter. Further, direct COVID-19 care costs and fewer commercial insurance plans might have hurt earnings.

This apart, the testing, vaccine and therapeutic makers are riding on a huge market adoption of their COVID-19-related healthcare-support products and services.

Let’s take a look at the five healthcare stocks that are scheduled to announce earnings results on Oct 29.

DaVita, Inc. DVA: Robust performance of the net dialysis along with the related lab patient service segment is likely to have contributed to the company’s top line in the soon-to-be-reported quarter.

Of late, the company worked with predictive analytics to identify the chronic kidney disease patients with the highest risk of transition to End Stage Renal Disease (ESRD). Through the second quarter, DaVita Kidney Care segment continued delivering an impressive performance with respect to the treatments of Chronic Kidney Disease (CKD) and ESRD. We expect this trend to get reflected in the third-quarter results as well. (Read more: DaVita to Report Q3 Earnings: What's in the Offing?).

The Zacks Consensus Estimate for third-quarter revenues is pegged at $2.94 billion, indicating a rise of 1.3% from the year-ago period’s reported figure. The same for earnings per share (EPS) stands at $1.49, suggesting a 2.6% dip from the year-earlier quarter’s reported number.

DaVita does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — which increases the odds of an earnings beat. It has an Earnings ESP of 0.00% and a Zacks Rank #1, presently.

the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Over the last four quarters, the company’s bottom line beat the consensus estimate in all the trailing four quarters, the average being 28.24%.

DaVita Inc. Price and EPS Surprise

DaVita Inc. Price and EPS Surprise
DaVita Inc. Price and EPS Surprise

DaVita Inc. price-eps-surprise | DaVita Inc. Quote

Charles River Laboratories CRL is expected to post quarterly earnings of $1.80 per share in its upcoming report, implying a rise of 6.5% from the year-earlier quarter’s reported figure. Revenues are expected to gross $715.66 million, suggesting a 7.1% increase from the year-ago quarter’s reported number.

For Charles River, the Most Accurate Estimate is pegged higher than the Zacks Consensus Estimate, signifying that analysts recently grew bullish on the company's earnings prospects. This uptrend  in turn, led to the company’s Earnings ESP of +1.51%. Moreover, the stock currently carries a Zacks Rank #3. So, this perfect combination of elements indicates that Charles River will most likely beat EPS estimates this time around.

Over the last four quarters, the company’s bottom line outpaced the consensus mark in all the last four quarterly reports, the average being 15.41%.

Charles River Laboratories International, Inc. Price and EPS Surprise

Charles River Laboratories International, Inc. Price and EPS Surprise
Charles River Laboratories International, Inc. Price and EPS Surprise

Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote

Chemed Corporation CHE: This operator of the Roto-Rooter plumbing service and Vitas Healthcare hospices is expected to post quarterly earnings of $3.99 per share in its upcoming release, which hints at 15.3% growth from the prior-year quarter’s reported number.

Revenues are expected to log $517.08 million, implying a 7.6% increase from the year-ago quarter’s reported figure.

The stock has an Earnings ESP of 0.00% and a Zacks Rank of 3, currently.
Over the last four quarters, the company’s earnings surpassed EPS estimates on all four occasions, the average being 6.32%.

Chemed Corporation Price and EPS Surprise

Chemed Corporation Price and EPS Surprise
Chemed Corporation Price and EPS Surprise

Chemed Corporation price-eps-surprise | Chemed Corporation Quote

Universal Health Services, Inc.’s UHS quarterly performance is likely to have been dented by lower admissions. The volume of non-COVID patients is expected to have declined in the period.

The company’s segments, namely Acute Care and Behavioral Health, which have been contributing to its top line over the last several quarters, might affect results due to the coronavirus pandemic.

Acute care facilities are likely to have taken a hit from the spike in COVID-19 cases and decreasing non-COVID patients. (Read more: Universal Health to Report Q3 Earnings: What to Expect)

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $2.04 per share, indicating a 2.5% rise from the year-ago period’s reported figure.

The stock has an Earnings ESP of 0.00% and is Zacks #3 Ranked, currently.

Over the last four quarters, the company’s earnings outshined the Zacks Consensus Estimate twice in the preceding four quarters (and missed the same on the remaining two occasions), the average surprise being 106.30%.

Universal Health Services, Inc. Price and EPS Surprise

Universal Health Services, Inc. Price and EPS Surprise
Universal Health Services, Inc. Price and EPS Surprise

Universal Health Services, Inc. price-eps-surprise | Universal Health Services, Inc. Quote

NovoCure Limited NVCR, an oncology company, is expected to post quarterly earnings of 4 cents per share in its upcoming report, indicative of 100% growth from the year-earlier quarter’s reported figure.

Revenues are expected to be $118.76 million, hinting at 29% growth from the year-ago quarter’s reported number.

The stock has an Earnings ESP of +100.00% and a Zacks Rank #4 (Sell), currently.

Over the last four quarters, the company’s bottom line topped the consensus mark on two occasions of the trailing four quarters, missing the same in one and meeting estimates in another, the average offbeat being 140%.

NovoCure Limited Price and EPS Surprise

NovoCure Limited Price and EPS Surprise
NovoCure Limited Price and EPS Surprise

NovoCure Limited price-eps-surprise | NovoCure Limited Quote

 

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Universal Health Services, Inc. (UHS) : Free Stock Analysis Report
 
DaVita Inc. (DVA) : Free Stock Analysis Report
 
Charles River Laboratories International, Inc. (CRL) : Free Stock Analysis Report
 
Chemed Corporation (CHE) : Free Stock Analysis Report
 
NovoCure Limited (NVCR) : Free Stock Analysis Report
 
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