Rise in Revenues Is Expected for Universal Health Services



Rise in revenues 

Universal Health Services (UHS) will announce its 3Q15 earnings result, for the period ending September 30, 2015, on October 27, 2015. Wall Street has estimated Universal Health Services’ 3Q15 revenues to be about $2.2 billion, a growth of about 9.5% on year-over-year (or YoY) basis.

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Strong revenue growth

Universal Health Services has witnessed strong revenue growth from the second half of 2013 onward on account of strong patient volumes in the company’s acute care as well as behavioral health hospitals. To know more about Universal Health Services, please refer to Universal Health Services: A must-read company overview

Changing market dynamics

Similar to other for-profit hospitals in the United States such as HCA Holdings (HCA), LifePoint Hospitals (LPNT), and Community Health Systems (CYH), Universal Health Services has witnessed a fall in the percentage of uninsured patients. This fall has occurred since 2014 and could be mainly attributed to patients getting health insurance due to various changes introduced by the Affordable Care Act, such as through Medicaid expansion and private health insurance exchanges. The improving economy also helped in raising the employment rate and subsequently the number of people with employer-sponsored health insurance.

The rise in the insured population has reduced Universal Health Services’ bad debt expenses and helped in boosting revenues. Commercial exchange enrollments and an improving economy are expected to be some of the driving factors for Universal Health Services’ revenues in the later half of 2015 as well as early 2016 though the impact will be lesser than that witnessed in 2014 and early 2015.

Universal Health Services’ acute care patient volumes are also expected to be positively impacted by pent-up demand. As the economy improves, people are expected to opt for surgical procedures that they had deferred during previous years.

You can invest in the company through the First Trust Health Care AlphaDEX ETF (FXH). Universal Health Services accounts for 2.24% of the ETF’s total holdings.


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