Universal Health Services, Inc. (UHS) recently surprised on estimates and raised 2009 EPS guidance. Analysts expect year over year earnings growth in 2009 of 17.05%. UHS is trading with a forward P/E of 13.
Company Description
Universal Health Services operates acute care and behavioral health hospitals, ambulatory centers, surgical hospitals and radiation oncology centers nationwide and in Puerto Rico.
Universal Health Beats for the Third Straight Quarter
On July 28, Universal reported second quarter results that surprised on Zacks Consensus Estimates by 27.43%. Earnings per share rose 33% to $1.44 from $1.08 in the year ago period. The Zacks Consensus Estimate called for $1.13.
Revenues climbed 3% to $1.3 billion from $1.26 billion in the second quarter of 2008. Acute care services and behavioral health hospitals both saw revenues increase year over year, by 2.9% and 4%, respectively.
2009 Guidance Raised
Given the results in the first 2 quarters and optimistic trends, the company increased its 2009 full year guidance to the range of $4.40 to $4.55 per share from the prior range of $4.00 to $4.15.
Zacks Consensus Estimates Rise
Given the higher guidance and second quarter earnings surprise, covering analysts scrambled to raise estimates for the third quarter and the full year.
The third-quarter Zacks Consensus Estimate rose 2 cents to 83 cents in the last week with 10 out of 17 analysts raising.
The full-year Zacks Consensus Estimate jumped 8.7% to $4.51 from $4.15 in the last 30 days. This is at the high end of the company’s guidance range.
Value Fundamentals
Universal Health Services is a Zacks #1 Rank (strong buy) stock. It has a price-to-book of 1.71. The company has a solid 5-year average return on equity (ROE) of 12.06%.
Additionally, Universal Health pays a dividend, with a current yield of 0.50%.