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Tenet Healthcare Corporation (THC - Free Report) reported fourth-quarter 2021 adjusted net earnings of $2.70 per share, which surpassed the Zacks Consensus Estimate and rose year over year, both by 73.1%.
THC’s results gained from reduced expenses and operational excellence.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Net operating revenues dipped 1.2% year over year to $4.8 billion due to weak performances by its Hospital and Conifer segments. The top line missed the Zacks Consensus Estimate by 2.8%.
THC’s adjusted net income from continuing operations plunged 41.9% year over year to $294 million. In the fourth quarter, adjusted EBITDA excluding grant income totaled $877 million, which increased 5.4% from the prior-year quarter’s level.
Operating expenses fell 3.9% year over year to $4.3 billion in the quarter owing to lower salaries, wages and benefits, other net operating expenses, depreciation and amortization, reduced Impairment and restructuring charges, and acquisition-related costs.
Quarterly Segmental Details
Hospital Operations and Other
Net operating revenues (which exclude grant income) from the segment amounted to $3.9 billion, which fell 3.8% year over year. The downside was due to the sale of its Miami-area hospitals on Aug 1, 2021.
On same-hospital basis, net patient service revenues improved 1.7% year over year to $3.545 billion.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) excluding grant income was $440 million, which increased 2.1% year over year.
Ambulatory Care
The Ambulatory Care segment delivered net operating revenues of $742 million in the fourth quarter, which climbed 14.3% year over year. The improvement can be attributed to expanding volumes, improved patient acuity, growth in new service line and added revenues from the buyout of SCD portfolio in December 2020. However, the uptick was partly offset by the second-quarter 2021 divestiture of USPI's urgent care centers and the imaging centers as part of the reorganization process under the Hospital segment.
The segment reported an adjusted EBITDA excluding grant income of $343 million, up 18.3% from the prior-year quarter’s level.
Conifer
Net operating revenues from the segment declined 5.8% year over year to $324 million due to previously disclosed Tenet contract changes as well as the receipt of $9 million for services revenues in fourth-quarter 2020.
Adjusted EBITDA from the segment was $94 million in the quarter under review, down 15.3% year over year.
Financial Position
Tenet Healthcare exited 2021 with cash and cash equivalents of $2.3 billion, which declined 3.4% from the level at 2020 end. It doesn’t have any outstanding borrowings under its $1.9-billion line-of-credit facility as of Dec 31, 2021.
During 2021, net cash provided by operating activities declined 54% year over year.
Business Update
THC acquired 6 centers from SurgCenter Development (SCD) in the fourth quarter.
Full-Year Update
THC's adjusted net income from continuing operations for 2021 came in at $7.58, down 4.3% year over year. For the full year, adjusted EBITDA came in at $3.483 billion, down 10.7% year over year. Revenues for 2021 increased 10.5% from the prior-year quarter’s level.
2022 Guidance
Concurrent with fourth-quarter results, THC released its 2022 guidance. For the current year, net income is projected in the range of $645-$775 million, indicating a decline from the 2021 figure of $915 million.
Net operating revenues are anticipated between $19.5 billion and $19.9 billion, the midpoint indicating an upside of 1.1% from the 2021 reported figure of $19.48 billion.
Adjusted EBITDA is estimated to be $3.375-$3.575 billion, suggesting 6% core growth from 2021’s reported figure.
Adjusted EPS is expected within $5.86-$7.05, the midpoint being down 14.8% from the 2021 reported figure. The guidance for net cash provided by operations activities ranges from $1.150 billion to $1.450 billion, the midpoint indicating a downside of 17.1% from the 2021 reported figure.
Free cash flow is expected in the band of $425-$675 million, implying a decline from the 2021 reported figure of $910 million.
Q122 Outlook
Revenues are expected in the range of $4.6-4.8 billion. Adjusted EPS for the quarter is expected between 92 cents and $1.15.
Among other players from the Medical space that have reported results so far, the bottom-line results of UnitedHealth Group Inc. (UNH - Free Report) and Anthem Inc. beat respective estimates while earnings of HCA Healthcare, Inc. (HCA - Free Report) missed the mark.
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Tenet Healthcare (THC) Q4 Earnings Beat Estimates, Surge Y/Y
Tenet Healthcare Corporation (THC - Free Report) reported fourth-quarter 2021 adjusted net earnings of $2.70 per share, which surpassed the Zacks Consensus Estimate and rose year over year, both by 73.1%.
THC’s results gained from reduced expenses and operational excellence.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Tenet Healthcare Corporation price-consensus-eps-surprise-chart | Tenet Healthcare Corporation Quote
Quarterly Operational Update
Net operating revenues dipped 1.2% year over year to $4.8 billion due to weak performances by its Hospital and Conifer segments. The top line missed the Zacks Consensus Estimate by 2.8%.
THC’s adjusted net income from continuing operations plunged 41.9% year over year to $294 million. In the fourth quarter, adjusted EBITDA excluding grant income totaled $877 million, which increased 5.4% from the prior-year quarter’s level.
Operating expenses fell 3.9% year over year to $4.3 billion in the quarter owing to lower salaries, wages and benefits, other net operating expenses, depreciation and amortization, reduced Impairment and restructuring charges, and acquisition-related costs.
Quarterly Segmental Details
Hospital Operations and Other
Net operating revenues (which exclude grant income) from the segment amounted to $3.9 billion, which fell 3.8% year over year. The downside was due to the sale of its Miami-area hospitals on Aug 1, 2021.
On same-hospital basis, net patient service revenues improved 1.7% year over year to $3.545 billion.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) excluding grant income was $440 million, which increased 2.1% year over year.
Ambulatory Care
The Ambulatory Care segment delivered net operating revenues of $742 million in the fourth quarter, which climbed 14.3% year over year. The improvement can be attributed to expanding volumes, improved patient acuity, growth in new service line and added revenues from the buyout of SCD portfolio in December 2020. However, the uptick was partly offset by the second-quarter 2021 divestiture of USPI's urgent care centers and the imaging centers as part of the reorganization process under the Hospital segment.
The segment reported an adjusted EBITDA excluding grant income of $343 million, up 18.3% from the prior-year quarter’s level.
Conifer
Net operating revenues from the segment declined 5.8% year over year to $324 million due to previously disclosed Tenet contract changes as well as the receipt of $9 million for services revenues in fourth-quarter 2020.
Adjusted EBITDA from the segment was $94 million in the quarter under review, down 15.3% year over year.
Financial Position
Tenet Healthcare exited 2021 with cash and cash equivalents of $2.3 billion, which declined 3.4% from the level at 2020 end. It doesn’t have any outstanding borrowings under its $1.9-billion line-of-credit facility as of Dec 31, 2021.
During 2021, net cash provided by operating activities declined 54% year over year.
Business Update
THC acquired 6 centers from SurgCenter Development (SCD) in the fourth quarter.
Full-Year Update
THC's adjusted net income from continuing operations for 2021 came in at $7.58, down 4.3% year over year. For the full year, adjusted EBITDA came in at $3.483 billion, down 10.7% year over year. Revenues for 2021 increased 10.5% from the prior-year quarter’s level.
2022 Guidance
Concurrent with fourth-quarter results, THC released its 2022 guidance. For the current year, net income is projected in the range of
$645-$775 million, indicating a decline from the 2021 figure of $915 million.
Net operating revenues are anticipated between $19.5 billion and $19.9 billion, the midpoint indicating an upside of 1.1% from the 2021 reported figure of $19.48 billion.
Adjusted EBITDA is estimated to be $3.375-$3.575 billion, suggesting 6% core growth from 2021’s reported figure.
Adjusted EPS is expected within $5.86-$7.05, the midpoint being down 14.8% from the 2021 reported figure. The guidance for net cash provided by operations activities ranges from $1.150 billion to $1.450 billion, the midpoint indicating a downside of 17.1% from the 2021 reported figure.
Free cash flow is expected in the band of $425-$675 million, implying a decline from the 2021 reported figure of $910 million.
Q122 Outlook
Revenues are expected in the range of $4.6-4.8 billion. Adjusted EPS for the quarter is expected between 92 cents and $1.15.
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
Among other players from the Medical space that have reported results so far, the bottom-line results of UnitedHealth Group Inc. (UNH - Free Report) and Anthem Inc. beat respective estimates while earnings of HCA Healthcare, Inc. (HCA - Free Report) missed the mark.