Tenet Healthcare Corp.

Company Description

Tenet owns and operates hospitals, health care facilities, and invests in other health care companies. The company's rehab hospitals, specialty hospitals, and long-term care facilities are spread out across the U.S.

Third Surprise

After previewing its results for the second quarter, Tenet confirmed them a few days later on Aug 4. These results included a 51% jump in adjusted EBITDA, to $246 million. The same-hospital number was up 43% to $241.

These figures yielded EPS of 5 cents, compared to the Zacks Consensus Estimate that was calling for a breakeven quarter. This was the third time in a row that Tenet beat expectations.

Bullish Outlook

On Sep 14 Tenet decided to raise is full year outlook for 2009. Adjusted EBITDA is now projected to fall between $900 million and $950 million, up from $810 million to $875 million.

CEO Speaks

"Our third quarter results through August were stronger than anticipated and extended the improving trend evident in our second quarter," said Trevor Fetter, president and CEO.

Fetter also said the company was seeing better-than-expected trends in bad debt expense, volume, and other areas.

Projections Rising

Following the aforementioned news, it is no surprise to see analysts raising EPS estimates. The average forecast from analysts polled by Zacks is now 6 cents for full-year 2009, up from a 5 cent loss, over the past 2 months.

The Zacks Consensus Estimate for 2010 is at 8 cents, up from a breakeven year in the same time frame. This would be a growth rate of 175% in 2009 and another 40% in 2010.

The Chart

Shares of THC got a nice boost on high volume from both the earnings preview and the more recent release that raised guidance. The stock is now just below its 52-week high. Take a look at the chart below.

Read the full analyst report on THC