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Tenet Healthcare Corporation (THC - Free Report) delivered second-quarter 2020 adjusted net earnings of $1.26 per share. The Zacks Consensus Estimate was of a loss of 99 cents per share. Further, the bottom line soared 125% year over year, mainly owing to operational performance in its business segments and lower expenses.
The company faces substantial declines in elective procedures during April followed by an improvement in May and June.
Quarterly Operational Update
Net operating revenues of $3.6 billion decreased 20% year over year due to weak contribution from Hospital operations, Ambulatory and Conifer segments. Moreover, the top line missed the Zacks Consensus Estimate by 4.8% due to volatility in monthly volumes.
The company reported net income from continuing operations of $88 million, comparing favorably with the year-ago quarter’s net income of $24 million. In the quarter under review, adjusted EBITDA was $732 million, up 9.4% year over year.
Operating expenses fell 12.1% year over year to $3.4 billion.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Net operating revenues of the Hospital Operations and Other segment totaled $3.08 billion, down 19.3% year over year. This was due to the impact of coronavirus, which shrank patient volumes.
On a same-hospital basis, net patient revenues were $2.83 billion, down 20.2% year over year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $492 million surged 37% year over year.
Ambulatory
The Ambulatory segment generated net operating revenues of $368 million in the second quarter, down 29.8% year over year.
Additionally, the segment reported adjusted EBITDA of $167 million, down 19.3% year over year.
Conifer
Conifer’s revenues dropped 14.1% from the prior-year quarter to $305 million. This was primarily due to client attrition as a result of hospital divestitures by both Tenet and other customers along with the COVID-19 adversity on volumes.
The segment reported $73 million of adjusted EBITDA in the quarter under review, down 29.1% year over year.
2020 Outlook
The company withdrew its full-year guidance in April due to the COVID-19 impact on the economy.
Financial Position
As of Jun 30, 2020, Tenet Healthcare had cash and cash equivalents of $3.3 billion, up from $262 million at 2019 end.
The company exited the second quarter with $15.7 billion of long-term debt, up 7.9% from the level at 2019 end.
At the end of the second quarter, net cash provided by operating activities was $2.4 billion compared with $294 million in the year-ago period.
Of the medical sector players that already reported second-quarter results, earnings of UnitedHealth Group Inc. (UNH - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Universal Health Services, Inc. (UHS - Free Report) beat the respective Zacks Consensus Estimate.
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Tenet Healthcare (THC) Q2 Earnings Beat Estimates, Rise Y/Y
Tenet Healthcare Corporation (THC - Free Report) delivered second-quarter 2020 adjusted net earnings of $1.26 per share. The Zacks Consensus Estimate was of a loss of 99 cents per share. Further, the bottom line soared 125% year over year, mainly owing to operational performance in its business segments and lower expenses.
The company faces substantial declines in elective procedures during April followed by an improvement in May and June.
Quarterly Operational Update
Net operating revenues of $3.6 billion decreased 20% year over year due to weak contribution from Hospital operations, Ambulatory and Conifer segments. Moreover, the top line missed the Zacks Consensus Estimate by 4.8% due to volatility in monthly volumes.
The company reported net income from continuing operations of $88 million, comparing favorably with the year-ago quarter’s net income of $24 million. In the quarter under review, adjusted EBITDA was $732 million, up 9.4% year over year.
Operating expenses fell 12.1% year over year to $3.4 billion.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Tenet Healthcare Corporation price-consensus-eps-surprise-chart | Tenet Healthcare Corporation Quote
Quarterly Segmental Details
Hospital & Other
Net operating revenues of the Hospital Operations and Other segment totaled $3.08 billion, down 19.3% year over year. This was due to the impact of coronavirus, which shrank patient volumes.
On a same-hospital basis, net patient revenues were $2.83 billion, down 20.2% year over year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $492 million surged 37% year over year.
Ambulatory
The Ambulatory segment generated net operating revenues of $368 million in the second quarter, down 29.8% year over year.
Additionally, the segment reported adjusted EBITDA of $167 million, down 19.3% year over year.
Conifer
Conifer’s revenues dropped 14.1% from the prior-year quarter to $305 million. This was primarily due to client attrition as a result of hospital divestitures by both Tenet and other customers along with the COVID-19 adversity on volumes.
The segment reported $73 million of adjusted EBITDA in the quarter under review, down 29.1% year over year.
2020 Outlook
The company withdrew its full-year guidance in April due to the COVID-19 impact on the economy.
Financial Position
As of Jun 30, 2020, Tenet Healthcare had cash and cash equivalents of $3.3 billion, up from $262 million at 2019 end.
The company exited the second quarter with $15.7 billion of long-term debt, up 7.9% from the level at 2019 end.
At the end of the second quarter, net cash provided by operating activities was $2.4 billion compared with $294 million in the year-ago period.
Zacks Rank
Tenet Healthcare currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the medical sector players that already reported second-quarter results, earnings of UnitedHealth Group Inc. (UNH - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Universal Health Services, Inc. (UHS - Free Report) beat the respective Zacks Consensus Estimate.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>