The hospital operator reported a loss of 6 cents per share on revenue of $2.16 billion, with analysts surveyed by Thomson Reuters expecting a loss of 3 cents per share on revenue of $2.21 billion, according to the Associated Press (AP).
While Tenet was able to report a profit in the quarter, earning $104 million on an investment sales gain — as opposed to the $59 million loss it reported a year ago — it wasn’t enough to keep the company from cutting its full-year outlook to $700 million to $750 million from $750 million to $825 million.
Biggs Porter, Tenet’s CFO, told investors in a conference call that he couldn’t recall a more difficult time to predict future results, according to the AP
Tenet noted a bad debt rise of 5.8 percent — to $163 million from $142 million — from treating uninsured or underinsured patients.
The operator is feeling the effects of the weak economy, with patients struggling to pay for their care. The operator saw a rise in government managed-care admission, up 13.5 percent, while the more lucrative commercial patients declined 3.4 percent. It also reported an estimated $4 million in negative effects from Hurricane Ike.
A Deutsche Bank analyst downgraded the company to “Hold” from “Buy."
Despite the challenges the operator is facing, the company is trying to remain positive.
“While a softening economy may have constrained the robust momentum evident earlier in the year, we are confident we are on the right track, and we remain committed to our growth strategies,” said Tenet President and CEO Trevor Fetter, according to the AP.
Tenet noted that it is seeing improvements on some fronts — outpatient visits and surgical admissions are up. Tenet is also exploring opportunities to expand, recently adding 900 new physicians and moving towards a goal of 1,000 additions in 2008.
Read the AP’s coverage of Tenet’s third-quarter results here and here.
Read the press release on Tenet’s third quarter earnings (pdf).
