HMA Remains Stuck in Sick Bay

To be sure, Tenet still faces some clear challenges. Most importantly, perhaps, the company continues to treat fewer patients covered by lucrative commercial health insurance. Commercially insured admissions fell by 2.2% in the latest period.

Tenet also issued some disappointing guidance. Excluding results from its embattled USC Hospital, which will be classified under discontinued operations due to its planned sale, Tenet expects to lose between $20 million and $120 million over the year. That disappointed Wall Street, which had been hoping to see the company eek out a small profit.

Tenet was satisfied with the second-quarter results. "I am very pleased with our core same-hospital growth in admissions, as well as the increase in outpatient visits by paying patients," Tenet CEO Trevor Fetter stated on Tuesday. "Not only is this the best performance we've had in the last four years, it continues an improving trend and demonstrates the increasing effectiveness of our strategies."

Arguably, HMA's vital signs looked worse. For starters, the company missed both top-line and bottom-line estimates for the second quarter.

Revenue inched up just 3.9% to $1.11 billion, falling a bit shy of the $1.13 billion consensus forecast. Net income grew by a little more, rising 4.1% to $12.4 million in the latest period. Excluding special items, however, earnings per share of 10 cents came in a penny short of Wall Street targets.

HMA's volume trends looked especially troubling. The rural hospital operator saw admissions fall by 3.8% in the second quarter, with most of that drop-off caused by a decline in patients covered by insurance. For its part, the company blamed the downturn on "short-term issues" that it said it has already begun to address.