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Tenet Healthcare (THC) Q2 Earnings Miss, Revenues Beat

Tenet Healthcare Corp.THC reported second-quarter 2016 operating earnings of 38 cents per share that missed the Zacks Consensus Estimate of 49 cents by 22.4%. Also, the bottom line deteriorated 49% on a year-over-year basis.

Tenet Healthcare Corporation (THC) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Operational Update

Second-quarter net operating revenue of Tenet Healthcare came in at $5 billion, up 3.6% from the prior-year quarter. An increase in revenues from hospital operations, the Conifer segment and the ambulatory segment primarily drove the upside. Revenues also surpassed the Zacks Consensus Estimate of $4.8 billion by 5.1%

The company reported adjusted EBITDA (Earning before Interest, Taxes, Depriciation and Amortization) of $617 million for the second quarter, up 8.6% year over year.

Tenet Healthcare's patient revenues increased 4.4 % from the prior-year quarter to $3.743 billion. The increase was attributable to a 0.5% uptick in adjusted patient admissions and a 3.9% rise in net patient revenue per adjusted admission.

Total admissions were down 4% to $193.9 million and adjusted admissions dipped 1.8% to $342.8 million, both on a year-over-year basis. Additionally, Surgeries improved 2.1% year over year to $130.2 million.

Tenet Healthcare's provision for doubtful accounts was $352 million in the second quarter, which represents 6.7% of revenues before bad debt compared with $352 million or 7.3% of revenues before bad debt in the second quarter of 2015.

Tenet Healthcare's uninsured plus charity admissions declined 7.9% on the same hospital basis in the reported quarter.

Financial Position

As of Jun 30, 2016, Tenet Healthcare had cash and cash equivalents of $656 million, up 84% from $356 million as of Dec 31, 2015.

The company exited the second quarter with total assets worth $24.2 billion, up 2.1% from $23.7 billion as of Dec 31, 2015.

Shareholders' equity as of Jun 30, 2016 was $523 million, down 24.3% from $691 million as of Dec 31, 2015.

Net operating cash flow of $582 million in the first six months of 2016 compared with $353 million in the prior-year period. Free cash flow was $169 million in the first six months of 2016. This indicates a $175 million increase from a $6 million outflow in the year-ago period.

Adjusted free cash flow was $268 million the first six months of 2016, up $180 million from $88 million in the comparable period in 2015.

2016 Outlook

For 2016, Tenet Healthcare projects revenues in the range of $19.5-$19.8 billion, adjusted EBITDA of $2.4-$2.5 billion and adjusted earnings per diluted share of $1.32-$1.67.

Tenet Healthcare expects adjusted free cash flow of $400-$600 million.

Net loss from continuing operations are estimated in the range of $65-$30 million. Loss per share is expected to be in the range of 66 cents - 30 cents.

Net operating cash flow is projected between $1.2 billion and $1.3 billion.

Third-Quarter 2016 Outlook

For the hird quarter, the company expects revenues in the range of $4.75-$4.85 billion, adjusted EBITDA of $50-$600 million and adjusted earnings per diluted share of 10-25 cents.

TENET HEALTH Price, Consensus and EPS Surprise

TENET HEALTH Price, Consensus and EPS Surprise | TENET HEALTH Quote

Zacks Rank and Other Stocks in the Hospital Industry

Currently, Tenet Healthcare carries a Zacks Rank #3 (Hold).

Among the other stocks in the Hospital Industry that have reported their second-quarter earnings so far, the bottom line at HCA Holdings Inc. HCA surpassed the Zacks Consensus Estimate, while the earnings of Adeptus Health Inc. ADPT missed the estimates. Universal Health Services Inc.'s UHS earnings met the Zacks Consensus Estimate.

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UNIVL HLTH SVCS (UHS): Free Stock Analysis Report

TENET HEALTH (THC): Free Stock Analysis Report

HCA HOLDINGS (HCA): Free Stock Analysis Report

ADEPTUS HEALTH (ADPT): Free Stock Analysis Report

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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.


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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