UPDATE 2-Tenet Healthcare posts loss on acquisition costs
Feb 24 (Reuters) - Tenet Healthcare Corp posted a fourth-quarter net loss on Monday due to costs primarily for financing its acquisition of smaller hospital chain Vanguard Health Systems.
Its shares slipped 2.8 percent in after-hours trading to $47 from a close of $48.33 Monday.
Tenet acquired Vanguard for about $1.8 billion last fall to expand into new markets and position itself to benefit from an increase in patients with health insurance under President Barack Obama's healthcare reform.
Hospitals have seen admissions decline in recent years as Americans who lacked insurance or faced rising out-of-pocket expenses avoided seeking medical care.
Tenet said its adjusted admissions, which include both inpatient and outpatient figures, fell 0.5 percent in the fourth quarter. Inpatient admissions were down 2.3 percent.
Tenet Chief Executive Officer Trevor Fetter said inpatient volumes remained a challenge for the industry, but that the company is in a position to benefit from the evolving healthcare marketplace.
"The healthcare coverage of newly insured patients under the Affordable Care Act will generate net benefits by reducing the burden of bad debt expense and gradually driving higher volumes," Fetter said.
Tenet's fourth-quarter earnings from continuing operations, excluding $60 million in acquisition-related costs and expenses for restructuring, litigation and other items, exceeded analysts' expectations.
Excluding items, income from continuing operations was $43 million, or 43 cents a share, down from $65 million, or 60 cents a share, in the same period a year ago.
On the basis, analysts on average had expected a profit of 34 cents a share in the latest quarter, according to Thomson Reuters I/B/E/S.
Dallas-based Tenet reported a net loss of $24 million, or 24 cents a share, compared with net income of $49 million, or 45 cents, a year ago. Net operating revenue increased about 67 percent in the quarter to $3.89 billion.
Earnings before interest, tax, depreciation and amortization and excluding special items increased 32 percent to $444 million from a year ago.
Bad debt expense increased by $5 million, to $205 million, in the fourth quarter, compared with a year ago.
For 2014, Tenet forecast adjusted EBITDA in the range of $1.8 billion to $1.9 billion. The outlook includes an assumed contribution of $50 million to $100 million from the Affordable Care Act and another $50 million to $100 million in synergies from the Vanguard acquisition.
Adjusted admissions in 2014 are expected in a range of down 1 percent to up 1 percent.