Feb 24 Tenet Healthcare Corp posted a
fourth-quarter net loss on Monday due to costs primarily for
financing its acquisition of smaller hospital chain Vanguard
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
"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
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
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.