Tenet's ( THC) shaky health has taken a turn for the worse.

A complete examination that was intended to evaluate Tenet's near- and long-term prospects has detected a slew of serious problems. As a result, Tenet is bracing for a slow and tedious recovery -- with no chance of even nearing Wall Street estimates in the interim.

"Tenet is navigating through a very challenging transitional period," said Trevor Fetter, Tenet's president and interim CEO, on Monday. "We now believe this transitional period will continue through at least the first half of 2004, and its impact on our financial performance will be more substantial than previously mentioned."

On the basis of a systemwide review of its hospitals -- and mounting pressures on the bottom line -- Tenet warned Monday that upcoming results will fall "significantly below" analysts' expectations. The second quarter looks particularly ugly. After taking a number of special charges -- including a sizable hit for severance payments to ousted CEO Jeffrey Barbakow -- Tenet mustered earnings of only 2 cents a share during the first two months of the current quarter. The company, which offered no hope for improvement in June, was originally expected to deliver second-quarter earnings of 34 cents a share.

Now, Tenet expects to generate barely more than that -- as little as 40 cents a share -- over the next two quarters combined. The company believes that modest earnings pattern will continue, producing full-year earnings of 80 cents to $1 a share, for at least the next 12 months. It also warned that extraordinary charges -- from impairments, restructuring and litigation -- are likely to cut into financial results even further.

Investors, who were looking for 2003 profits of $1.61 a share, took a knife to Tenet's stock. The shares lost 22%, or $3.63, after the regular session opened. At $12.60 a share, the stock is now trading at a new multiyear low.

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