Tenet Healthcare Tops Estimates

OKLAHOMA CITY -- Tenet Healthcare's THC vital signs continue to improve, thanks to an uptick in patients who actually pay their bills.

The long-suffering hospital chain did swing to a $31 million loss in the first quarter, as litigation costs more than offset operational gains. Excluding special items, however, the company posted earnings of 4 cents a share -- 3 cents ahead of Wall Street's modest expectations.

Revenue of $2.37 billion, up a healthy 6.7% from a year ago, topped the consensus estimate as well.

Quite simply, Tenet attracted more patients with health insurance -- and charged them higher prices for their treatment -- than it did a year ago. The company reported widespread improvements as a result.

Notably, for the first time since early 2004, Tenet managed to increase patient volumes for two quarters in a row. Same-hospital admissions rose a full percentage point, with insured patients providing the boost for a change. Volumes remained strong through April, too, signaling possible continuation of this positive and all-important trend.

"Our growth strategies are working, as evidenced by this strong financial performance, the success of our physician relationship effort and increases in patient volumes in many of the service lines identified by our Targeted Growth Initiative," Tenet CEO Trevor Fetter stated on Tuesday. "I am very pleased with the progress we've made."

Tenet's stock was off 2 cents to $6.45 in recent trading.

Still, Tenet outshined the rest of the hospital group on Tuesday. Community Health Systems CYH, the largest publicly traded hospital chain, fell 3.9% to $34.73. Two rural hospital chains, Health Management Associates HMA and LifePoint LPNT, lost some ground as well.