Tenet posts lower net profit, absorbs Vanguard
(Reuters) - Tenet Healthcare Corp (THC.N) said its third-quarter net income slid from a year earlier due to costs related to its acquisition of smaller hospital chain Vanguard Health Systems Inc.
Tenet completed the acquisition of Vanguard for about $1.8 billion on October 1 to expand into new markets and position itself to benefit from an increase in patients who have health insurance under President Barack Obama's healthcare reform. Tenet on Monday said the integration of Vanguard was proceeding smoothly.
Income excluding special items rose in the third quarter as the hospital operator reduced expenses and improved revenue growth.
Dallas-based Tenet said income from continuing operations, excluding acquisition-related, legal, restructuring and other costs, rose to $46 million, or 45 cents a share, from $35 million, or 33 cents a share, the year before.
Earnings before interest, tax, depreciation and amortization and excluding special items increased 7.1 percent to $288 million.
Net income fell to $28 million, or 27 cents a share, from $40 million, or 37 cents, a year ago. Net operating revenue in the quarter rose 8.4 percent to $2.41 billion.
Tenet said its inpatient admissions fell 2.6 percent in the third quarter, offsetting a 3.5 percent rise in outpatient visits. The combined figure, called adjusted admissions, declined 0.5 percent.
Hospitals are struggling with declining admissions as many Americans continue to stay away from the doctor due to lack of insurance or high deductibles on their plans. But anticipation of more paying customers under health reform has buoyed the shares of publicly traded hospital companies this year.
Tenet's uncollected bills increased to $210 million in the latest quarter, up $4 million from a year earlier.
The company expects admissions to grow and uncollected bills decline when more Americans become eligible for insurance starting in 2014 through exchanges set up under the healthcare reform law.