Tenet Healthcare Corporation


THC

is set to beat earnings estimates for first-quarter 2022, whose results are set to be released on Apr 20, after the closing bell.

In the last reported quarter, the leading healthcare service provider’s adjusted net earnings of $2.70 per share beat the Zacks Consensus Estimate of $1.56, primarily due to reduced expenses and operational excellence. Improved performance of the Ambulatory Care business supported the bottom line.

Let’s see how things have improved prior to the

first-quarter 2022 earnings

announcement.

Trend in Estimate Revision

In the past seven days, the Zacks Consensus Estimate for first-quarter 2022 earnings per share of $1.04 has witnessed no upward or downward revisions. This estimate is indicative of a 20% decline from the year-ago reported figure of $1.30 per share. Similarly, the Zacks Consensus Estimate for revenues is pegged at $4.7 billion, suggesting a decrease of 1.9% from the year-ago reported figure.

Tenet Healthcare beat earnings estimates in each of the trailing four quarters, delivering an average surprise of 66%. This is depicted in the graph below.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Tenet Healthcare this time around as well. The combination of a positive

Earnings ESP

and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP:

Earnings ESP for the company is currently +2.06%. This is because the Most Accurate Estimate is currently pegged at $1.06 per share, higher than the Zacks Consensus Estimate of $1.04. You can uncover the best stocks to buy or sell before they’re reported with our

Earnings ESP Filter

.

Zacks Rank:

Tenet Healthcare currently holds a Zacks Rank #3.

Factors Driving Q1 Earnings

The gradual improvement in adjusted admissions and outpatient admissions throughout the first quarter is likely to strengthen Tenet Healthcare’s results. Also, the company’s operations are expected to have gained from the strong performance of the USPI Holding Company, Inc., in which Tenet Healthcare holds a 95% interest.

THC’s growing care network is expected to have contributed generously toward first-quarter performance. Further, decreasing operating costs are likely to have benefited its bottom line, positioning the company for an earnings beat.

Yet, the Zacks Consensus Estimate for THC’s Ambulatory segment adjusted EBITDA (including grant income) for the first quarter is pegged at $192 million, indicating a decline from $257 million a year ago. Similarly, the consensus mark for Conifer segment adjusted EBITDA is pegged at $71 million, signaling a decrease from $86 million in the year-ago period.

The Zacks Consensus Estimate for THC’s Hospital segment adjusted EBITDA is pegged at $367 million, predicting a decline from $434 million a year ago. These factors might have resulted in a year-over-year decline in earnings per share in the first quarter, partially offset by declining operating costs.

Other Stocks That Warrant a Look

Here are some other companies from the

Medical

space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:

ProPhase Labs, Inc.


PRPH

has an Earnings ESP of +22.08% and a Zacks Rank of 2. You can see


the complete list of today’s Zacks #1 Rank stocks here


.

ProPhase’s bottom line for the to-be-reported quarter is expected to rise 69.6% year over year.

Avanos Medical, Inc.


AVNS

has an Earnings ESP of +4.17% and is a Zacks #2 Ranked player.

Avanos Medical’s earnings per share for the to-be-reported quarter are expected to jump 4.4% year over year.

Axcella Health Inc.


AXLA

has an Earnings ESP of +2.83% and a Zacks Rank #2.

Axcella Health’s bottom line for the to-be-reported quarter is expected to improve 5% year over year.

Stay on top of upcoming earnings announcements with the

Zacks Earnings Calendar

.

Just Released: Zacks Top 10 Stocks for 2022

In addition to the investment ideas discussed above, would you like to know about our 10 top buy-and-hold tickers for the entirety of 2022?

Last year’s 2021

Zacks Top 10 Stocks

portfolio returned gains as high as +147.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys

Access Zacks Top 10 Stocks for 2022 today >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.

Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research