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Sector Update: Health Care Stocks Little Changed; Tenet Healthcare Sinking After Q3 Net Income Falls From Year-Ago Levels

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Health care stocks were narrowly mixed, with the NYSE Health Care Sector Index climbing about 0.1% and shares of health care companies in the S&P 500 were down 0.1% as a group.

In company news, Tenet Healthcare Corp ( THC ) was lower in mid-day trade, giving back a small gain soon after the market open. The hospital company trumped analyst predictions with its Q3 earnings and revenue, also guiding Q4 earnings above the Street view.

Net income during the quarter narrowed to $9 million, or $0.09 per share, from a $28 million gain during the same three-month period last year. Excluding asset-impairment costs and discontinued operations, it earned $0.36 per share, beating the analyst consensus by $0.27 per share.

Revenue rose 6% year over year to $4.18 billion, exceeding the Street view by around $170 million. The company said it benefited from increased admissions under Obamacare and reduced spending on charity care for uninsured patients in states that have expanded Medicaid services.

For the 12 months ending in December, THC is projecting per-share earnings in a range of $1.26 to $1.78, topping the Capital IQ consensus for FY14 net income by at least $0.01 per share.

THC shares were up down nearly 7% at $52.82 each, earlier falling to an intra-day low of $52.29 a share. The stock has traded within a 52-week range of $37.95 to $63.61 a share, rising 17% over the past year prior to the start of Tuesday's session.

In other sector news,

(+) SKH, (+4.4%) Adjusted Q3 earnings of $0.13 per share beat analyst estimates by $0.06 per share. Revenue was unchanged from last year at $208.6 mln, matching consensus. Sees Q4 adjusted EPS of $0.14 to $0.16, topping Street by at least $0.06 per share.

(-) ACHN, (-15.5%) Fails to provide any data on its ACH-3422 prospective hepatitis C treatment in Q3 earnings report. Net loss widens to $15.7 mln, or $0.16 per share, from $13.9 mln loss last year and beating Street estimates by $0.02 per share.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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