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Tenet Healthcare Corp.(THC - Free Report) reported second-quarter 2016 operating earnings of 38 cents per share that missed the Zacks Consensus Estimate of 49 cents by 22.4%. Also, the bottom line deteriorated 49% on a year-over-year basis.
Second-quarter net operating revenue of Tenet Healthcare came in at $5 billion, up 3.6% from the prior-year quarter. An increase in revenues from hospital operations, the Conifer segment and the ambulatory segment primarily drove the upside. Revenues also surpassed the Zacks Consensus Estimate of $4.8 billion by 5.1%
The company reported adjusted EBITDA (Earning before Interest, Taxes, Depriciation and Amortization) of $617 million for the second quarter, up 8.6% year over year.
Tenet Healthcare’s patient revenues increased 4.4 % from the prior-year quarter to $3.743 billion. The increase was attributable to a 0.5% uptick in adjusted patient admissions and a 3.9% rise in net patient revenue per adjusted admission.
Total admissions were down 4% to $193.9 million and adjusted admissions dipped 1.8% to $342.8 million, both on a year-over-year basis. Additionally, Surgeries improved 2.1% year over year to $130.2 million.
Tenet Healthcare's provision for doubtful accounts was $352 million in the second quarter, which represents 6.7% of revenues before bad debt compared with $352 million or 7.3% of revenues before bad debt in the second quarter of 2015.
Tenet Healthcare's uninsured plus charity admissions declined 7.9% on the same hospital basis in the reported quarter.
Financial Position
As of Jun 30, 2016, Tenet Healthcare had cash and cash equivalents of $656 million, up 84% from $356 million as of Dec 31, 2015.
The company exited the second quarter with total assets worth $24.2 billion, up 2.1% from $23.7 billion as of Dec 31, 2015.
Shareholders’ equity as of Jun 30, 2016 was $523 million, down 24.3% from $691 million as of Dec 31, 2015.
Net operating cash flow of $582 million in the first six months of 2016 compared with $353 million in the prior-year period. Free cash flow was $169 million in the first six months of 2016. This indicates a $175 million increase from a $6 million outflow in the year-ago period.
Adjusted free cash flow was $268 million the first six months of 2016, up $180 million from $88 million in the comparable period in 2015.
2016 Outlook
For 2016, Tenet Healthcare projects revenues in the range of $19.5–$19.8 billion, adjusted EBITDA of $2.4–$2.5 billion and adjusted earnings per diluted share of $1.32–$1.67.
Tenet Healthcare expects adjusted free cash flow of $400–$600 million.
Net loss from continuing operations are estimated in the range of $65–$30 million. Loss per share is expected to be in the range of 66 cents - 30 cents.
Net operating cash flow is projected between $1.2 billion and $1.3 billion.
Third-Quarter 2016 Outlook
For the hird quarter, the company expects revenues in the range of $4.75–$4.85 billion, adjusted EBITDA of $50–$600 million and adjusted earnings per diluted share of 10–25 cents.
Zacks Rank and Other Stocks in the Hospital Industry
Currently, Tenet Healthcare carries a Zacks Rank #3 (Hold).
Among the other stocks in the Hospital Industry that have reported their second-quarter earnings so far, the bottom line at HCA Holdings Inc. (HCA - Free Report) surpassed the Zacks Consensus Estimate, while the earnings of Adeptus Health Inc. (ADPT - Free Report) missed the estimates. Universal Health Services Inc.’s (UHS - Free Report) earnings met the Zacks Consensus Estimate.
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Tenet Healthcare (THC) Q2 Earnings Miss, Revenues Beat
Tenet Healthcare Corp.(THC - Free Report) reported second-quarter 2016 operating earnings of 38 cents per share that missed the Zacks Consensus Estimate of 49 cents by 22.4%. Also, the bottom line deteriorated 49% on a year-over-year basis.
Operational Update
Second-quarter net operating revenue of Tenet Healthcare came in at $5 billion, up 3.6% from the prior-year quarter. An increase in revenues from hospital operations, the Conifer segment and the ambulatory segment primarily drove the upside. Revenues also surpassed the Zacks Consensus Estimate of $4.8 billion by 5.1%
The company reported adjusted EBITDA (Earning before Interest, Taxes, Depriciation and Amortization) of $617 million for the second quarter, up 8.6% year over year.
Tenet Healthcare’s patient revenues increased 4.4 % from the prior-year quarter to $3.743 billion. The increase was attributable to a 0.5% uptick in adjusted patient admissions and a 3.9% rise in net patient revenue per adjusted admission.
Total admissions were down 4% to $193.9 million and adjusted admissions dipped 1.8% to $342.8 million, both on a year-over-year basis. Additionally, Surgeries improved 2.1% year over year to $130.2 million.
Tenet Healthcare's provision for doubtful accounts was $352 million in the second quarter, which represents 6.7% of revenues before bad debt compared with $352 million or 7.3% of revenues before bad debt in the second quarter of 2015.
Tenet Healthcare's uninsured plus charity admissions declined 7.9% on the same hospital basis in the reported quarter.
Financial Position
As of Jun 30, 2016, Tenet Healthcare had cash and cash equivalents of $656 million, up 84% from $356 million as of Dec 31, 2015.
The company exited the second quarter with total assets worth $24.2 billion, up 2.1% from $23.7 billion as of Dec 31, 2015.
Shareholders’ equity as of Jun 30, 2016 was $523 million, down 24.3% from $691 million as of Dec 31, 2015.
Net operating cash flow of $582 million in the first six months of 2016 compared with $353 million in the prior-year period. Free cash flow was $169 million in the first six months of 2016. This indicates a $175 million increase from a $6 million outflow in the year-ago period.
Adjusted free cash flow was $268 million the first six months of 2016, up $180 million from $88 million in the comparable period in 2015.
2016 Outlook
For 2016, Tenet Healthcare projects revenues in the range of $19.5–$19.8 billion, adjusted EBITDA of $2.4–$2.5 billion and adjusted earnings per diluted share of $1.32–$1.67.
Tenet Healthcare expects adjusted free cash flow of $400–$600 million.
Net loss from continuing operations are estimated in the range of $65–$30 million. Loss per share is expected to be in the range of 66 cents - 30 cents.
Net operating cash flow is projected between $1.2 billion and $1.3 billion.
Third-Quarter 2016 Outlook
For the hird quarter, the company expects revenues in the range of $4.75–$4.85 billion, adjusted EBITDA of $50–$600 million and adjusted earnings per diluted share of 10–25 cents.
TENET HEALTH Price, Consensus and EPS Surprise
TENET HEALTH Price, Consensus and EPS Surprise | TENET HEALTH Quote
Zacks Rank and Other Stocks in the Hospital Industry
Currently, Tenet Healthcare carries a Zacks Rank #3 (Hold).
Among the other stocks in the Hospital Industry that have reported their second-quarter earnings so far, the bottom line at HCA Holdings Inc. (HCA - Free Report) surpassed the Zacks Consensus Estimate, while the earnings of Adeptus Health Inc. (ADPT - Free Report) missed the estimates. Universal Health Services Inc.’s (UHS - Free Report) earnings met the Zacks Consensus Estimate.
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