Tenet Loses $2.02 Billion
Tenet
(THC) - Get Report
reported another charge-laden quarter Tuesday, while laying out the circumstances by which more than two years of upheaval might begin to ease in 2005.
Tenet lost $2.02 billion, or $4.33 a share, in the fourth quarter, a sum that included a $1.2 billion pretax asset writedown, a $480 million allowance for its deferred tax asset and losses from discontinued operations of $420 million. Excluding the items, Tenet lost 6 cents a share in the quarter, compared with Wall Street's estimated 9-cent loss.
Revenue fell 2% to $2.41 billion, matching the analyst consensus.
Tenet, a hospital operator thrown into chaos in mid-2002 by a series of scandals related to Medicare billing and questionable surgeries, has been contending more recently with declining admissions and an industrywide problem involving underinsured patients. In the fourth quarter, Tenet said, same-hospital admissions fell 3.8% from a year ago, although the decline has leveled off in January and February of 2005.
"Most of the fourth-quarter decline was business we would have preferred to retain, but about a quarter of it resulted from deliberate decisions to reduce unprofitable services and less-favorable contracts with certain managed care payers," Tenet said in the release.
Tenet said it still expects to post an operating loss on revenue that is flat with or slightly above the $9.9 billion it put up in all of 2004, although the company also described a litany of factors that could affect that view, including payouts related to its ongoing legal travails, which have been
the subject of
extensive coverage on this Web site. Cash flow from operations will be $150 million to $350 million in 2005.
"If the company is able to achieve industry-average admissions growth, with the high degree of operating leverage inherent in the acute hospital industry, this should have a positive impact on Tenet's future results," the company said. "Conversely, if the negative admissions trends of 2004 continue, Tenet will not meet its current objectives for operating performance in 2005."
The stock closed at $11.03 Monday.