(This Feb. 26 story corrects paragraph 3 to say the CEO comment was from a statement, not off a conference call)
By Tamara Mathias
(Reuters) - Tenet Healthcare Corp (THC.N) on Monday raised its 2018 forecasts after the hospital operator reported higher patient admissions for the first time in over a year and beat Wall Street estimates for revenue and profit in the fourth quarter.
Shares of the company rose 7.8 percent to $19.07 after the bell.
“Volume growth returned in our hospital and ambulatory segments... Our cost control program is off to a great start,” interim Chief Executive Officer Ronald Rittenmeyer said in a statement.
“When combined with improved financial performance in the fourth quarter, we are raising our outlook.”
Over the past year, a downturn in business across the sector cast a shadow on debt-laden Tenet, which laid off over a thousand employees and announced the departure of its longtime chief executive.
The company raised full-year adjusted earnings per share from continuing operations to between 73 cents and $1.07 from the prior forecast of 58 cents to 97 cents, partly due to higher-than-expected Medicaid reimbursements.
However, sales from its Conifer division, which provides technology and financial services to hospitals and healthcare companies, fell 2 percent to $394 million in the quarter.
Tenet said it is considering a sale of the division. Analysts said such a move could be used by the hospital operator to pay down debt, which stood at $14.88 billion as of September 2017.
The company said it expects 2018 net operating revenue to be between $17.9 billion and $18.3 billion, up from prior forecast of $17.8 billion to $18.2 billion.
Tenet said adjusted admissions on a same-hospital basis, which include patients who stay overnight and those treated on an outpatient basis, rose 1.3 percent in the fourth quarter and revenue per adjusted admission rose 4.8 percent.
The strong quarter mirrors results of rival HCA Healthcare Inc (HCA.N), which last month reported better-than-expected quarterly earnings and revenue, helped by strong patient volumes.
Tenet’s quarterly loss widened to $229 million, or $2.27 per share, in the quarter ended Dec. 31, from $79 million, or 79 cents per share, a year earlier, partly due to one-time charge from changes in the U.S. tax law.
Excluding items, the Dallas, Texas-based Tenet earned $1.40 per share.
Net operating revenue rose 2.4 percent to $4.98 billion, mainly due to a $202 million boost from the California Provider Fee Program, a Medicaid program that was renewed by the federal government in December.
Analysts on average were expecting a profit of $1.24 per share on a revenue of $4.87 billion, according to Thomson Reuters I/B/E/S.
Reporting by Tamara Mathias in Bengaluru; Editing by Arun Koyyur