Tenet Healthcare Corp.
) reported fourth-quarter 2012 earnings from continuing
operations of 52 cents per share, falling short of the Zacks
Consensus Estimate of 69 cents. Operating earnings bounced back
from a loss of 55 cents in the year-ago quarter.
Growth in revenues, largely driven by higher volumes and
improved pricing fueled the year-over-year improvement, along
with cost control measures.
Net income, including loss from discontinued operations of $8
million or 7 cents a share, was $49 million or 45 cents per share
in the reported quarter, recovering from a loss of $76 million or
70 cents in the year-ago quarter. Net income for the fourth
quarter of 2011 includes $74 million or 68 cents per share
related to a loss on early extinguishment of debt and $16 million
or 15 cents per share related to a loss from discontinued
Net operating revenues stood at $2.33 billion, up 7.3% from
$2.17 billion in the prior-year quarter. However, reported
revenues lagged the Zacks Consensus Estimate of $2.52
During the reported quarter, Tenet Healthcare's net patient
revenues per adjusted admission increased 2.8% on a
year-over-year basis to $11,866, primarily due to improved terms
of commercial managed care contracts and increased Medicare
reimbursement rates, partly offset by a less-favorable payer
Total admissions remained at the year-ago quarter's level,
while adjusted admissions increased 2.9% year over year due to
higher outpatient visits. Surgeries increased 7.5% while
emergency department visits improved 8.6%.
Bad debt expense, as a percentage of revenues, increased 20
basis points year over year to 7.9%, stemming from an upsurge in
the number of uninsured patients.
Tenet Healthcare posted adjusted earnings before interest,
taxes, depreciation and amortization (EBITDA) of $336 million in
the reported quarter, up 16.7% from $288 million in the
prior-year quarter. Adjusted EBITDA margin was 14.4%, expanding
110 basis points year over year.
Full-Year 2012 Highlights
For full year 2012, Tenet Healthcare reported operating income
of $1.70 per share, missing the Zacks Consensus Estimate of $1.96
but ahead of the year-ago level of 56 cents. Operating income
increased to $185 million from $68 million in 2011.
Tenet Healthcare's net operating revenue amounted to $9.12
billion in 2012, lagging the Zacks Consensus Estimate of $9.88
billion but 5.4% higher than $8.65 billion reported in 2011.
Moreover, adjusted EBITDA grew 6.8% year over year to $1.20
billion in 2012.
Additionally, net income was $141 million or $1.30 per share
compared with $58 million or 48 cents per share in 2011.
Tenet Healthcare exited 2012 with cash and cash equivalents of
$364 million, surging from $113 million as of Dec 31, 2011. As of
Dec 31, 2012, total assets of Tenet Healthcare were $9.04 billion
and shareholders' equity was $1.14 billion.
Net cash flow from operating activities in 2012 was $593
million, improving from $497 million in 2011.
Tenet Healthcare's capital expenditures decreased to $148
million in the quarter from $177 million in the prior-year
Tenet Healthcare announced its adjusted EBITDA guidance of
$250 million to $290 million for the first quarter of 2013.
Adjusted EBITDA guidance for 2013 was affirmed at $1.325-$1.425.
The first quarter guidance excludes any contribution associated
with the managed care portion of the 30 month California Provider
Operating income is projected to be about $835-$965 million.
Additionally, shares outstanding as of Dec 31, 2013 are expected
to be approximately 104 million. Consequently, adjusted earnings
per share for 2013 are expected to be about $2.31-$3.31 for
Further, net income in 2013 is anticipated around $118-$234
Results at Other Medical Companies
Health Management Associates
), a leading operator of general acute care hospitals, reported
fourth quarter and 2012 adjusted (excluding one-time expenses
other than stock-based compensation expense) earnings per share
of 19 cents and 75 cents, respectively, missing the corresponding
Zacks Consensus Estimates of 20 cents and 83 cents.
Community Health Systems, Inc.
) declared its fourth-quarter earnings of 85 cents per share, at
par with the Zacks Consensus Estimate but striding ahead of the
year-ago earnings of 82 cents.
Acadia Healthcare Company, Inc.
) reported adjusted income of 19 cents per share in the fourth
quarter of 2012, in line with the Zacks Consensus but beating the
year-ago period's earnings of 13 cents.
Tenet Healthcare carries a Zacks Rank #2 (Buy).
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