This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Red Ink Flowing at Tenet

A slew of restructuring and litigation charges sent embattled hospital chain Tenet Healthcare (THC - Get Report) to a $195 million loss in the second quarter, and the company foresees more margin compression and revenue pressure in coming quarters.

The company, which Wednesday night said it would pay $54 million to settle allegations its doctors carried out unnecessary heart surgeries, lost $195 million, or 42 cents a share, on revenue of $3.38 billion in the latest period, compared with earnings of $242 million, or 48 cents a share, on revenue of $3.43 billion last year. There were 69 cents in charges in the latest quarter, including items for asset impairment, restructuring and legal costs.

Besides the charges, Tenet has been coping with a steep reduction in the money it receives from Medicare for unusual operations called "outlier procedures," as well as growing costs. "While we continue to face revenue pressures in the near term, as well as rising cost pressures, we are aggressively moving to reduce costs and bring them in line with our current revenue stream," the company said. "We expect to realize the benefits of these actions later this year and in 2004, and in the interim we are experiencing margin compression as expected."

Outlier revenue was $16 million in the second quarter, compared with $223 million a year ago, causing same-facility unit revenue to fall 6.6%. Second-quarter salaries and benefits costs were $1.47 billion, up from $1.46 billion last year.

Tenet's hospital admissions rose 2.5% overall and 3% on a same-facility basis in the second quarter, over a year ago. Outpatient visits declined 1.2% overall and 0.7% on a same-facility basis.

Mostly reflecting optimism over the settlement, Tenet's shares were recently up $1.15, or 9%, to $14.20 on the Instinet premarket session.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
THC $51.38 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs