Tenet Healthcare Corporation (NYSE:THC) today reported Adjusted EBITDA of $269 million for the third quarter ended September 30, 2012, an increase of $77 million, or 40 percent, as compared to Adjusted EBITDA of $192 million in the third quarter of 2011. Net income attributable to common shareholders was $40 million, or $0.37 per diluted share, compared to $6 million, or $0.05 per diluted share in the third quarter of 2011.
“Strong revenue growth and disciplined cost control continue to drive our solid financial performance,” said Trevor Fetter, president and chief executive officer. “Adjusted EBITDA increased 40 percent to create the Company’s strongest third quarter in the last ten years. Net revenues grew by 5.8 percent reflecting strong volume increases and continued pricing strength. Our volume growth was one of the strongest in the investor-owned healthcare provider sector, and we recorded our eighth consecutive quarter of positive growth in adjusted admissions. Volume growth was led by a 6.3 percent increase in outpatient surgeries. Cost control was excellent. Conifer Health Solutions, Tenet’s services business, reported another solid quarter contributing $24 million to Adjusted EBITDA.”
“As we look to the fourth quarter, state officials in California recently informed the hospital industry that the managed care portion of the California Provider Fee program is not likely to be approved in 2012,” said Mr. Fetter. “This program had been expected to contribute more than $40 million to Adjusted EBITDA in the fourth quarter. We now expect these earnings to be recognized in 2013. As a result of this delay and recent trends in volumes and payer mix, we now expect Adjusted EBITDA of approximately $1.2 billion for 2012.”
Discussion of Results
(Percentage changes compare Q3’12 to Q3’11, unless otherwise noted.)
In the third quarter, adjusted admissions increased by 1.4 percent, and total admissions declined by 0.5 percent. Outpatient surgeries extended their strong growth trend increasing by 6.3 percent and total emergency department visits increased by 4.9 percent.