Hospitals Headed for Rough Quarter

Meanwhile, Tenet itself continues to bleed. Feinstein believes the company will report a loss of 7 cents a share -- 3 cents worse than the consensus estimate -- when it provides a quarterly update next month.

The company's stock, which topped $13 before the storms hit, tumbled 2.5% to $10.95 on Monday.

Universal Challenges

Universal fared better, slipping less than 1% to $47.25, despite its own hurricane exposure. Feinstein notes that Universal operates three New Orleans hospitals that now face an uncertain future.

"We highlight that it is unclear at this time as to whether UHS will remain in the New Orleans market," writes Feinstein, who has an equal-weight rating on the stock. "Hence, a sizable portion of the 7% of revenue that UHS generated from its three facilities in New Orleans will be at risk for the foreseeable future."

Universal faces other challenges as well. Notably, Feinstein points out, the company continues to struggle in its important McAllen, Texas, market.

"We believe that UHS could have managed through either of these issues individually," he says, "but the combined impact leads to reduced earnings visibility."

Feinstein, for one, sees a big miss coming. Specifically, he predicts that the company will report third-quarter profits of just 52 cents a share instead of the 64 cents Wall Street is anticipating.

Other Shortfalls

Feinstein believes that HCA will come up short as well.

He predicts that HCA, which operates several hospitals in New Orleans, will miss the 67-cent consensus estimate by 4 cents. Still, he sees the potential for upside if the company lays out plans for another big stock buyback.

HCA was the only hospital to hold its ground on Monday, inching up less than 1% to $48.30 a share.

Meanwhile, HMA fell on Feinstein's prediction of yet another rise in the company's level of uncompensated care. And LifePoint slid on his warning about lost volumes resulting from Katrina and, especially, Rita.