Universal Health Services Increases Sales but Misses Estimates on Earnings

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Universal Health Services (NYS: UHS) reported earnings on May 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Universal Health Services beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.

Gross margins dropped, operating margins were steady, net margins improved.

Revenue details
Universal Health Services chalked up revenue of $1.98 billion. The 13 analysts polled by S&P Capital IQ expected a top line of $1.93 billion on the same basis. GAAP reported sales were 3.5% higher than the prior-year quarter's $1.91 billion.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.13. The 18 earnings estimates compiled by S&P Capital IQ predicted $1.17 per share. GAAP EPS of $1.31 for Q1 were 14% higher than the prior-year quarter's $1.15 per share.


Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 44.4%, 50 basis points worse than the prior-year quarter. Operating margin was 13.6%, about the same as the prior-year quarter. Net margin was 6.5%, 50 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.93 billion. On the bottom line, the average EPS estimate is $1.12.

Next year's average estimate for revenue is $7.62 billion. The average EPS estimate is $4.39.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 111 members out of 121 rating the stock outperform, and 11 members rating it underperform. Among 39 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 35 give Universal Health Services a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Universal Health Services is outperform, with an average price target of $52.37.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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