CHS and Tenet stock tumbles after HCA warns of Q1 earnings, revenue miss

Nashville, Tenn.-based HCA Holdings released preliminary financial results for the first quarter of fiscal year 2017 on Monday, which fell short of analyst expectations.

The for-profit hospital operator said it expects first-quarter revenue of about $10.62 billion, up from $10.26 billion in the same period of 2016. However, HCA's expected first-quarter revenue is lower than the $10.78 billion top-line consensus estimate of analysts surveyed by Thomson Reuters, according to CNBC.

"Results for the first quarter of 2017 were affected by changes in payer mix and the loss of one day when compared to the first quarter of 2016," said HCA.

The company saw its percentage of Medicare admissions rise in the first quarter of FY 2017, while commercially insured patients made up less of its payer mix. On a same-facility basis, HCA's Medicare admissions comprised 48.1 percent of admissions in the first quarter of FY 2017, up from 47 percent in the same period of 2016. The company's managed care/health exchange admissions comprised 27.4 percent of admissions, down from 28.6 percent in the first quarter of 2016.

HCA said it expects first-quarter net income of $659 million, or $1.74 per diluted share, which fell short of the $1.79 analyst consensus.

The company's warning of a first-quarter revenue and earnings miss weighed heavily on shares of two of HCA's competitors — Dallas-based Tenet Healthcare and Franklin, Tenn.-based Community Health Systems. In afternoon trading on Monday, HCA's shares dropped 2.7 percent, while Tenet's shares fell 8.7 percent and CHS' shares dropped 7.5 percent, according to MarketWatch.

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