lost more than $300 million in the third quarter as its provisions for doubtful accounts ballooned and revenue contracted.
The hospital operator, which is the subject of numerous lawsuits and government investigations over allegations that some of its facilities performed unnecessary procedures to scam Medicare, lost $308 million, or 66 cents a share, in the latest quarter compared with earnings of $328 million, or 66 cents a share, last year. Revenue was $3.30 billion in the latest quarter compared with $3.52 billion a year ago.
On a continuing-operations basis, Tenet lost $235 million, or 50 cents a share, in the latest quarter. Tenet announced its results in a filing with the
Securities and Exchange Commission
The company's provision for doubtful accounts totaled $522 million in the latest quarter compared with $260 million last year. The company termed $212 million of the provision "additional" and said it reflected "an adverse change in our business mix as admissions of uninsured patients grew at an escalating rate." Tenet cited higher unemployment rates, a higher level of uninsured patients, and higher co-payments that must be shouldered by patients instead of insurance companies.
"Additionally, many of these patients are being admitted through the emergency department and often require more costly care, resulting in higher billings," it added.
The latest quarter also included impairment charges of $198 million for the writedown of long-lived assets at a handful of hospitals whose carrying value didn't reflect the reality of future cash flows.
The company reiterated a forecast first made in October that it will meet neither its old guidance of continuing earnings of 40 cents to 50 cents in the second half of 2003, nor its old range of 80 cents to $1 a share in 2004. Analysts surveyed by Thomson First Call had been forecasting earnings of 5 cents a share in the latest third quarter, 14 cents a share in the fourth quarter and 79 cents a sharer in all of 2004. (It wasn't immediately possible to determine a profitability measure that was comparable to the analyst consensus in the latest third quarter.)
"Tenet is navigating through a very challenging period," it said in the SEC filing. "We are dealing with both industry issues and company-specific issues (the more significant issues being past practices, litigation and investigations, and increased admissions growth from uninsured patients) that have placed the company in an especially difficult position. We continue to face lower revenue trends and increasing cost pressures. We also continue to incur substantial expenses relating to unusual litigation and investigations."