Net income at Dallas-based Tenet Healthcare Corp. dropped 30 percent in the third quarter of this year, from $40 million to $28 million, due to soft admissions and one-time nonrecurring expenses.
Tenet's operating expenses also increased slightly year-over-year. Operating income fell slightly, from $153 million in the third quarter of fiscal year 2012 to $148 million this year, as net revenue increased more than 8.4 percent to $2.4 billion.
Tenet President and CEO Trevor Fetter said in a news release he is encouraged by the earnings report. Although adjusted admissions dropped 0.5 percent and total admissions fell 2.6 percent, Tenet posted a lot of growth in the outpatient setting. Outpatient visits rose 3.5 percent in the third quarter, and total surgeries soared 17.8 percent.
Tenet's revenue cycle company, Conifer Health Solutions, also reported a 50 percent increase in EBITDA. The company is expected to grow more following Tenet's acquisition of Vanguard Health Systems. Tenet finalized the transaction Oct. 1, and executives expect to see savings and benefits from the deal in the coming quarters. "The integration of Vanguard's operations is proceeding smoothly, and we are excited about the additional strengths this acquisition brings to our company," Mr. Fetter said in the release.
For the nine months ended Sept. 30, Tenet has reported $110 million in losses compared with a $92 million net gain in the first nine months of FY 2012. Tenet posted massive losses in the first and second quarters this year due to the lagging volumes seen across the industry. However, net revenue was up 6.3 percent to more than $7.2 billion. Tenet's adjusted EBITDA for the first nine months increased to $898 million.
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