Tenet 3d-quarter profit short of forecast
The news sent its stock to its lowest point in a decade.
DALLAS - Tenet Healthcare Corp. said yesterday that it swung to a third-quarter profit on an investment sales gain, but the results fell short of Wall Street forecasts, and the company slashed its outlook as patients struggled to pay bills amid a worsening economy.
The results sent shares plummeting $1.51, or 36.65 percent, to $2.61, their lowest point in a decade.
The company, which owns Hahnemann University Hospital in Philadelphia, earned $104 million, or 22 cents a share, after a loss of $59 million, or 12 cents a share, a year earlier. Revenue rose 6 percent to $2.16 billion.
Excluding a $140 million gain from the sale of an investment and other items, the company lost 6 cents a share.
Analysts surveyed by Thomson Reuters expected a loss of 3 cents a share on revenue of $2.21 billion. Those estimates normally exclude onetime gains.
Tenet slashed its 2008 adjusted earnings guidance to between $700 million and $750 million for the year from prior guidance of $750 million to $825 million. It also said the 2009 profit guidance of $1 billion will be difficult to achieve, given the weakened economy.
"I can't recall a more difficult time in which to be predicting future results," said chief financial officer Biggs C. Porter, in a conference call with investors.
While total admissions at hospitals open at least a year rose 1.7 percent to 129,576 patients, commercial admissions - the most lucrative - fell 3.4 percent to just under 35,000. Government managed-care admissions rose 13.5 percent to 27,485 patients.
At the same time, bad debt rose 5.8 percent to $163 million from $142 million. Bad debt is the amount of debt a hospital incurs from treating uninsured or underinsured patients and has been unable to collect.
Tenet cited high unemployment in the majority of its markets as a troubling economic factor, along with home foreclosures.