Updated from 8:43 a.m.
shares slipped 9% early Tuesday after the company posted a sharp quarterly loss and said its financial chief would leave.
The Dallas-based hospital operator said its second-quarter loss more than doubled from a year ago, hurt by a rising tide of uninsured patients.
Meanwhile, the company said CFO Stephen Farber would leave once his successor is selected. Farber, 35, has been finance chief since November 2002.
"I understand Stephen's decision not to join us as we move our headquarters to Dallas and return instead to investment banking, private equity or a related field, and we wish him well," said CEO Trevor Fetter. "Fortunately, we have a deep and strong financial team in place at Tenet, and Stephen has agreed to remain with us until his successor is named. During this transition period, I intend to be more involved personally in all financial decisions."
In May, Tenet announced that its corporate headquarters will move from Santa Barbara, Calif., to Dallas early next year.
Tenet's second quarter showed a loss of $426 million, or 91 cents a share, a figure that included no fewer than 12 separate charges and gains affecting continuing and discontinued operations. The loss was $195 million, or 42 cents a share, a year ago. On a continuing operations basis, Tenet lost 45 cents a share in the latest quarter, including nine items totaling a negative 39 cents a share.
Backing out the 39 cents, Tenet's loss of 6 cents a share appears to be comparable to the Thomson First Call estimate for a loss of 1 cent a share. Revenue fell 3.3% to $2.57 billion in the quarter, missing estimates of $2.61 billion.
On a continuing operations basis, acute admissions fell 3% from a year ago to 173,262 in the most recent quarter, while uninsured patients made up about 3.5% of admissions in the second quarter compared with 3.2% in the first quarter.
Tenet said uninsured patients treated and released through its emergency rooms totaled 92,423 in the second quarter, up 5% from the first quarter. Uninsured patients made up 23% of all patients treated and released through the emergency department in the quarter.
The company's provision for doubtful accounts was $499 million in the second quarter, including a $204 million charge to write down self-pay accounts receivable. Excluding the charge, Tenet's bad debt expense totaled $295 million, or 11.5% of revenue in the second quarter 2004, compared with $291 million, or 11%, in the first quarter of 2004.
Tenet released its earnings via a
filing. In a separate filing, the company said the U.S. attorney in New Orleans issued a subpoena for information about doctor relationships and financial arrangements at three hospitals.
Tenet shares dropped $1.03 early Tuesday to $10.15.