We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Conifer Weakness Affect Tenet Healthcare's (THC) Q2 Earnings?
Read MoreHide Full Article
Tenet Healthcare Corporation (THC - Free Report) is set to report its second-quarter 2023 results on Jul 31 after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings per share of $1.26 suggests a 16% decrease from the prior-year figure of $1.50. The consensus mark remained stable over the past week. The consensus estimate for second-quarter revenues of $4.9 billion indicates a 5.7% increase from the year-ago reported figure.
Tenet Healthcare beat the consensus estimate for earnings in all the trailing four quarters, with the average surprise being 49.4%. This is depicted in the graph below:
Tenet Healthcare Corporation Price and EPS Surprise
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at THC’s previous-quarter performance first.
Q1 Earnings Rewind
The leading healthcare services company reported adjusted earnings of $1.42 per share for the previous quarter, beating the Zacks Consensus Estimate by 22.4%. The quarterly results were supported by a well-performing Ambulatory Care segment, expanding patient volumes within the Hospital Operations segment and a moderated pace of contract labor costs.
With seniors resuming elective procedures, which were delayed due to pandemic-related constraints, Tenet Healthcare is expected to have witnessed higher admissions and occupancy rate in the second quarter. Our estimate for adjusted patient admissions in hospital operations predicts 3.6% year-over-year growth.
Our model suggests that second-quarter total hospital patient days have improved 0.8% year over year. In same hospital basis, our estimate for adjusted patient admissions indicates more than 2% increase from a year ago. As such, we expect hospital operations and other revenues for the second quarter to have increased nearly 3% year over year.
Meanwhile, the Ambulatory Care business is likely to have gained from better patient volumes, new service line growth and higher pricing yield. Our estimate for the Ambulatory Care segment’s operating revenues suggests 15.3% growth from the prior-year quarter’s figure. Higher patient service revenues are likely to have provided a boost in the second quarter.
The above-mentioned factors are likely to have boosted THC’s top line in the second quarter. However, contract changes with Tenet Healthcare’s hospitals are expected to have affected its Conifer segment. Our estimate for Conifer’s revenues predicts a 1.3% decline year over year, partially offsetting the positives.
Moreover, rising operating costs, decline in licensed beds and average length of stay are expected to have affected its margins in the second quarter, reducing the bottom line and making an earnings beat uncertain. Our estimates for salaries, wages & benefits and supply costs suggest nearly 4% and 7% year-over-year growth, respectively.
Higher expenses are likely to have led to a 6.3% year-over-year decrease in adjusted EBITDA in the second quarter. We expect total licensed beds to have declined almost 2% year over year in the second quarter, while average length of stay is likely to have fallen nearly 6%.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Tenet Healthcare this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at $1.26 per share, which is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Tenet Healthcare currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for THC, here are some companies from the broader medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for Community Health’s bottom line for the to-be-reported quarter indicates an improvement of 88.5% from the year-ago period. The consensus mark for CYH’s revenues is pegged at more than $3 billion, indicating 2.9% year-over-year growth.
AstraZeneca PLC (AZN - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZeneca’s bottom line for the to-be-reported quarter is pegged at 98 cents per share, signaling 14% year-over-year growth. AZN beat earnings estimates in all the past four quarters, the average surprise being 8.1%.
SI-BONE, Inc. (SIBN - Free Report) has an Earnings ESP of +12.20% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for SI-BONE’s earnings per share for the to-be-reported quarter suggests an improvement of 24.1% from the year-ago period. SIBN beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 11.1%.
Image: Bigstock
Can Conifer Weakness Affect Tenet Healthcare's (THC) Q2 Earnings?
Tenet Healthcare Corporation (THC - Free Report) is set to report its second-quarter 2023 results on Jul 31 after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings per share of $1.26 suggests a 16% decrease from the prior-year figure of $1.50. The consensus mark remained stable over the past week. The consensus estimate for second-quarter revenues of $4.9 billion indicates a 5.7% increase from the year-ago reported figure.
Tenet Healthcare beat the consensus estimate for earnings in all the trailing four quarters, with the average surprise being 49.4%. This is depicted in the graph below:
Tenet Healthcare Corporation Price and EPS Surprise
Tenet Healthcare Corporation price-eps-surprise | Tenet Healthcare Corporation Quote
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at THC’s previous-quarter performance first.
Q1 Earnings Rewind
The leading healthcare services company reported adjusted earnings of $1.42 per share for the previous quarter, beating the Zacks Consensus Estimate by 22.4%. The quarterly results were supported by a well-performing Ambulatory Care segment, expanding patient volumes within the Hospital Operations segment and a moderated pace of contract labor costs.
Now let’s see how things have shaped up before the second-quarter earnings announcement.
Q2 Factors to Note
With seniors resuming elective procedures, which were delayed due to pandemic-related constraints, Tenet Healthcare is expected to have witnessed higher admissions and occupancy rate in the second quarter. Our estimate for adjusted patient admissions in hospital operations predicts 3.6% year-over-year growth.
Our model suggests that second-quarter total hospital patient days have improved 0.8% year over year. In same hospital basis, our estimate for adjusted patient admissions indicates more than 2% increase from a year ago. As such, we expect hospital operations and other revenues for the second quarter to have increased nearly 3% year over year.
Meanwhile, the Ambulatory Care business is likely to have gained from better patient volumes, new service line growth and higher pricing yield. Our estimate for the Ambulatory Care segment’s operating revenues suggests 15.3% growth from the prior-year quarter’s figure. Higher patient service revenues are likely to have provided a boost in the second quarter.
The above-mentioned factors are likely to have boosted THC’s top line in the second quarter. However, contract changes with Tenet Healthcare’s hospitals are expected to have affected its Conifer segment. Our estimate for Conifer’s revenues predicts a 1.3% decline year over year, partially offsetting the positives.
Moreover, rising operating costs, decline in licensed beds and average length of stay are expected to have affected its margins in the second quarter, reducing the bottom line and making an earnings beat uncertain. Our estimates for salaries, wages & benefits and supply costs suggest nearly 4% and 7% year-over-year growth, respectively.
Higher expenses are likely to have led to a 6.3% year-over-year decrease in adjusted EBITDA in the second quarter. We expect total licensed beds to have declined almost 2% year over year in the second quarter, while average length of stay is likely to have fallen nearly 6%.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Tenet Healthcare this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at $1.26 per share, which is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Tenet Healthcare currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for THC, here are some companies from the broader medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Community Health Systems, Inc. (CYH - Free Report) has an Earnings ESP of +33.72% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Community Health’s bottom line for the to-be-reported quarter indicates an improvement of 88.5% from the year-ago period. The consensus mark for CYH’s revenues is pegged at more than $3 billion, indicating 2.9% year-over-year growth.
AstraZeneca PLC (AZN - Free Report) has an Earnings ESP of +1.88% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZeneca’s bottom line for the to-be-reported quarter is pegged at 98 cents per share, signaling 14% year-over-year growth. AZN beat earnings estimates in all the past four quarters, the average surprise being 8.1%.
SI-BONE, Inc. (SIBN - Free Report) has an Earnings ESP of +12.20% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for SI-BONE’s earnings per share for the to-be-reported quarter suggests an improvement of 24.1% from the year-ago period. SIBN beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 11.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.