Can Front Line Care Drive Hill-Rom's (HRC) Q2 Earnings?

Hill-Rom Holdings, Inc. (NYSE:HRC) is scheduled to report second-quarter fiscal 2019 results on Apr 26, 2019 before market opens.

The company had delivered first-quarter fiscal 2019 adjusted earnings per share (EPS) of $1.02, an increase of 10.9% from the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 98 cents by 4.1%. The company delivered positive surprises in each of the trailing four quarters, the average beat being 4.2%.

Let’s take a look at how things are shaping up prior to this announcement.

Factors at Play

Hill-Rom (HRC) consistently reports strong Core revenue growth in domestic and international markets on solid segmental performance. The company expects this trend to show on the to-be-reported quarter results as well.

Within Patient Support Systems, domestic revenues are expected to grow on solid performance by all key capital product categories. In the last reported quarter, on a compared basis, revenues within this segment witnessed single-digit growth at CER. In fact, this was the third consecutive quarter of double-digit growth in med-surg bed systems, Clinical Workflow Solutions and U.S. safe patient handling equipment. Outside the United States, core Patient Support Systems revenues rose 6% at CER.

The Zacks Consensus Estimate for second-quarter Front Line Care revenues is pegged at $244 million, indicating a 2.5% increase from the year-ago figure.

Revenues at the Front Line Care segment are expected to demonstrate strong show in the fiscal second quarter on product developments within respiratory care, vital signs monitoring and the Vision Care portfolio.

In the last-reported quarter, the company witnessed solid performance across Europe, Latin America and the Asia Pacific. With all growth catalysts in place, we expect Hill-Rom to report strong top-line numbers in these regions again.

The Zacks Consensus Estimatefor Patient Support Systems revenues is pinned at $351 million, indicating a 1.1% decline from the year-ago figure.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $707.8 million, indicating 0.38% decline from the figure reported in the prior-year quarter.

In January 2019, Hill-Rom announced a collaboration with Microsoft (NASDAQ:MSFT) to bring advanced, actionable point-of-care data and solutions organizations providing healthcare services. This is expected to show in the second-quarter top-line performance.

Here’s What Our Quantitative Model Predicts

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.

Hill-Rom has a Zacks Rank #2 (Buy) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks worth considering as they have the right combination of elements to post an earnings beat in their upcoming quarterly results.

Evolus, Inc. (NASDAQ:EOLS) has an Earnings ESP of +24.39% and a Zacks Rank #3.

NanoString Technologies Inc. (NASDAQ:NSTG) has an Earnings ESP of +3.08% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aurora Cannabis, Inc. (TO:ACB) has an Earnings ESP of +73.33% and a Zacks Rank #3.

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