Tenet results miss estimates; shares slump
NEW YORK (Reuters) - Hospital operator Tenet Healthcare Corp (THC.N) posted worse-than-expected third-quarter results, hurt by unpaid patient bills, and cut its 2008 forecast, sending shares down more than 20 percent.
Tenet posted net income of $104 million, or 22 cents per share, compared with a net loss of $59 million, or 12 cents per share, a year ago.
Tenet's adjusted loss of 6 cents per share was worse than the 3-cent loss expected on average by analysts, according to Reuters Estimates.
The company's provision for patient bills it does not expect to collect, known as bad debt, rose 5.8 percent to $163 million at hospitals run by the company for over a year.
Tenet forecast 2008 adjusted earnings before interest, taxes, depreciation and amortization of between $700 million and $750 million. In August, it forecast $775 million to $825 million.
Dallas-based Tenet has grappled with shoring up its business as it recovers from government probes and frayed relationships with physicians.
"Disappointing (third-quarter) results and another cut to guidance underscore our concerns" about Tenet's turnaround, Morgan Stanley analyst David Veal said in a research note. "We expect the shares may be weak in the near-term and we remain on the sidelines as we believe management may yet need to concede its long-term earnings targets."
Tenet shares fell 99 cents, or 24 percent, to $3.13 in mid-day trading on the New York Stock Exchange.
(Reporting by Lewis Krauskopf; editing by Gunna Dickson)
