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Watch for Healthcare Stocks in Q1 Earnings: DVA, HCA, HUM

This week is going to be an engaging one (May 2-6) with 1117 companies (including 130 S&P 500 members) lined up to release their quarterly numbers. The results, so far, have not been much of a disappointment as had been anticipated at the onset of the earnings season, thanks to the lower estimates.

As per the latest Earnings Trend Report, overall first-quarter earnings for S&P 500 companies are expected to be down 7.3% from the year-ago quarter, slightly better than the earlier estimated decline of 9.7%.

Notably, earnings growth is expected to be positive for 7 of the 16 Zacks sectors in the quarter ended Mar 2016. Medical is one of the few sectors that are expected to record earnings growth in the first quarter.

A greater part of the Medical sector has already reported earnings with 60.4% of the Medical companies in the S&P 500 list, which represents 66% of the total market capitalization. Total earnings for these companies are up 6.3% from the same period last year on 11.8% higher revenues, with 78.1% beating the earnings estimates and 68.8% surpassing the revenue estimates.

Healthcare is an important component of the Medical sector and is expected follow the same earnings growth trajectory in the quarter. Here’s a sneak peek into three major healthcare companies that are lined up to report earnings this week:

DaVita HealthCare Partners Inc. DVA is set to report first-quarter 2016 results on May 4. An improved performance by Kidney Care, strategic acquisitions and collaborations with local hospitals are the key growth catalysts.

Notably, DaVita’s earnings topped the Zacks Consensus Estimate in the last four quarters, by an average of 2.64% (read more: DaVita Likely to Top Q1 Earnings: Stock to Gain?).



HCA Holdings HCA is set to report first-quarter 2016 results on May 3. The company is expected to benefit from the growing admission rate and improving payor mix based on the continuing implementation of the Affordable Care Act (Obamacare).

We note that HCA Holdings has posted a positive earnings surprise of 5.53% on an average over the last four quarters (read more: What's in the Cards for HCA Holdings in Q1 Earnings?).



Humana Inc. HUM is scheduled to report first-quarter 2016 results on May 4. Higher operating expenses and weakness in the Group Medicare Advantage business are expected to hurt the first-quarter release. Notably, Humana is set to be acquired by Aetna Inc. in the second half of 2016.

Also, Humana posted a negative earnings surprise of 0.11% on an average over the last four quarters (read more: Humana Q1 Earnings May Disappoint: Stock to Suffer?).



Check later on our full write-up on earnings releases of these stocks.

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HUMANA INC NEW (HUM): Free Stock Analysis Report
 
HCA HOLDINGS (HCA): Free Stock Analysis Report
 
DAVITA HEALTHCR (DVA): Free Stock Analysis Report
 
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