This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Red Ink Flowing at Tenet

A slew of restructuring and litigation charges sent embattled hospital chain Tenet Healthcare (THC) 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.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 17,651.86 +294.99 1.70%
S&P 500 2,048.61 +35.72 1.77%
NASDAQ 4,732.3450 +88.0330 1.90%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs