* Q1 adjusted EBITDA rises 27.2 pct to $379 million
* Q1 EPS from continuing ops 16 cents vs estimate 14 cents
* Raises full-year outlook for adjusted EBITDA
* Offers no comment on sweetened Community Health bid
* Shares down slightly in midday trading
(Adds details from company conference call, analyst comments,
byline; updates shares)
By Susan Kelly
CHICAGO, May 3 Hospital operator Tenet
Healthcare Corp (THC.N) posted higher-than-expected
first-quarter earnings on Tuesday on a rise in patient
admissions and raised its 2011 outlook, offering no comment on
a sweetened bid from hostile suitor Community Health Systems
Tenet's shares were little changed in morning trading on
the New York Stock Exchange as investor interest in its
response to Community's revised proposal overshadowed the
"Investors are likely to view today's results as just
enough to allow the company to continue to 'just say no,'" said
Susquehanna analyst A.J. Rice.
Tenet, which spurned Community Health's earlier advances
and even accused its larger rival in a lawsuit of improperly
admitting patients and overbilling Medicare, received a $4.1
billion sweetened offer from its unwanted suitor on Monday.
Community Health gave Tenet one week to respond, saying the
offer would expire on May 9 if it failed to begin discussions.
Tenet's shares slumped after the revised offer was made
because investors viewed the proposal and ultimatum as unlikely
to sway Tenet.
Tenet rejected Community Health's earlier $3.3 billion
offer on the grounds it grossly undervalued the company and
failed to reflect its prospects.
Tenet, the third-largest U.S. hospital operator, said
government information technology incentives, managed care rate
increases, cost controls and a reduction in bad debt boosted
its first-quarter results.
Adjusted earnings before interest, taxes, depreciation and
amortization rose 27.2 percent to $379 million.
Net income fell to $73 million, or 14 cents per share, from
$88 million, or 17 cents per share, a year earlier, reflecting
a higher tax expense.
Earnings from continuing operations were 16 cents per
share. On that basis, analysts on average expected 14 cents per
share, according to Thomson Reuters I/B/E/S.
Tenet said patient volumes rose for a second consecutive
quarter, helped by a 0.6 percent rise in admissions. Outpatient
visits increased by 6.1 percent and surgeries by 0.9 percent.
In a sign patient volume trends could move higher, elective
procedures, including orthopedic surgeries, were up from a year
ago, Tenet executives said on a conference call with analysts.
Patient visits declined across the industry after many
people lost jobs and health insurance and delayed treatments
during the recession.
"This is really the first time we've seen this in a couple
of years and it gives us confidence that consumers are
beginning to do discretionary surgery," Dr. Stephen Newman,
Tenet's chief operating officer, said on the call.
The Dallas-based company raised its outlook for full-year
2011 EBITDA to a range of $1.175 billion to $1.275 billion.
Previously, it forecast $1.15 billion to $1.25 billion.
Tenet shares were down 7 cents at $6.62 in midday trading
on the New York Stock Exchange. Community Health is offering
$7.25 per share.
(Reporting by Susan Kelly; editing by Gerald E. McCormick,
Ted Kerr and Andre Grenon)