Hospital chain Tenet Healthcare Corp. (THC) on Tuesday reported a net loss for the third quarter, hit by several unfavorable items. This compares to a profit last year that benefited from a gain on sales of investments. Revenue increased over 5% in the quarter, while total paying admissions edged down 0.1%. The company raised its full year adjusted EBITDA guidance, but reduced its net income forecast.
The Dallas, Texas-based company reported a third-quarter net loss attributable to shareholders of $3 million, compared to a profit of $104 million last year. Loss per share attributable to shareholders was $0.01, compared to a profit of $0.22 per share a year ago. For the second quarter, the company reported a net loss attributable to shareholders of $15 million or $0.03 per share.
Income from continuing operations for the third quarter plunged to $4 million or breakeven per share from $120 million or $0.25 per share reported last year.
On average, 19 analysts polled by Thomson Reuters expected the company to report a loss of $0.02 per share for the quarter. Analysts' estimates typically exclude special items.
The latest quarterly results wre hit by several items, including loss from discontinued operations, loss from early extinguishment of debt as well as litigation and investigation costs, with a net unfavorable impact of $18 million after-tax, or $0.04 per share. Results of the previous year included a gain of $140 million on sales of investments.
Adjusted EBITDA for the quarter increased to $240 million from $160 million for the third quarter of 2008.
Net operating revenues increased to $2.262 billion from $2.140 billion generated last year. Analysts expected revenue of $2.25 billion for the quarter. Second-quarter net operating revenues were $2.23 billion.
Operating income advanced to $133 million from last year's $70 million.
On a same-hospital continuing operations basis, Governmental Managed Care Admissions rose 9.1% and Charity Care Admissions increased 21.1%. Commercial Managed Care Admissions dropped 4.5% from the third quarter of 2008. Total admissions edged down 0.1%. Total surgery growth was 2.2%.
Net Inpatient Revenue per Admission rose 3.7%, while Net Outpatient Revenue per Visit grew 2.7%. Same-hospital bad debt ratio was 8.5% of net revenues, up 90 basis points from 7.6% in the third quarter of 2008. The company currently has 48 hospitals in same-hospital continuing operations.
Tenet, like its peers, has been suffering from a drop in admissions, coupled with an increase in uninsured patients and unpaid bills. President Barack Obama is pushing for a health care reform bill, which he believes could help ease the pace of healthcare cost increases.
For the first three quarters of the fiscal, net income attributable to the company's common shareholders increased to $160 million or $0.33 per share from $58 million or $0.12 per share in the prior year. Net operating revenues advanced to $6.753 billion from $6.408 billion in the previous year.
Looking ahead, the company now expects fiscal 2009 net income attributable to shareholders in a range of $66 million-$130 million, down from the prior range of $76 million to $141 million. In September, Tenet said it experienced better-than-expected interim results for the third quarter and lifted its profit forecast for 2009 to $76 million to $141 million from the previous projection of a loss of $20 million to a profit of $60 million.
However, the company today raised its 2009 outlook range for adjusted EBITDA by $25 million to a new range of $925 million-$975 million.
Among others in the industry, Community Health Systems Inc. (CYH) last month posted third quarter net income from continuing operations of $75.4 million or $0.65 per share, compared to $59.1 million or $0.52 per share in the same period last year. Net income increased to $59.7 million or $0.65 per share from $50.4 million or $0.53 per share a year-ago. Net operating revenues for the quarter totaled $3.08 billion, compared to $2.75 billion in last year quarter.
THC is currently trading at $5.29, down $0.01 or 0.19%, on a volume of 1.12 million shares.
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