For-profit hospital operators are expected to report modest profits this earnings season, even though most Americans have recovered from last quarter's historically severe flu season that boosted first-quarter results, analysts say.
U.S. hospitals, which have struggled with reduced insurance payments in recent years, have also suffered from a slump in admissions as more Americans seek cheaper treatment from pharmacies, outpatient clinics and other nontraditional care centers.
However, analysts say the outlook for hospitals remains strong as the group invests more in outpatient facilities that generate fatter profit margins and slashes spending to counter sluggish admissions. Additionally, the recent tax law changes have given a boost to for-profit hospitals, allowing them to investment more on aging infrastructure.
Here’s what analysts are watching for this quarter. All earnings-per-share estimates are based on adjusted earnings projections by analysts surveyed by Thomson Reuters: