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THC's Q2 adjusted EPS of $4.02 beat estimates by 41.6% and rose 74% year over year.
Improved acuity, payer mix and cost control boosted Q2 revenues, EBITDA and margins across segments.
THC raised 2025 adjusted EPS guidance to $15.55-$16.21 and hiked revenue and EBITDA projections.
Tenet Healthcare Corporation (THC - Free Report) reported second-quarter 2025 adjusted earnings per share (EPS) of $4.02, which surpassed the Zacks Consensus Estimate by 41.6%. The bottom line soared 74% year over year.
Net operating revenues advanced 3.2% year over year to $5.3 billion. The top line beat the consensus mark by 2.4%.
The company’s quarterly results were aided by higher same facility revenues, favorable payer mix and improved acuity, which led to strong performance of the Hospital Operations and Services segment. Facility buyouts buoyed the performance of the Ambulatory Care segment. However, the upside was partly offset by rising operating costs—particularly supplies expense.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Adjusted net income of $369 million climbed 63.3% year over year in the quarter under review.
Adjusted EBITDA improved 18.6% year over year to $1.1 billion, higher than our estimate of $997 million. The year-over-year growth resulted from improved same facility revenues, higher acuity, favorable payer mix and prudent expense management efforts. Adjusted EBITDA margin of 21.3% improved 280 basis points (bps) year over year.
Total operating costs increased 2.3% year over year to $4.5 billion in the second quarter due to a higher supplies expense.
Segmental Details
Hospital Operations and Services: The segment recorded net operating revenues of $4 billion, which inched up 0.9% year over year on the back of improved same hospital admissions, higher acuity and favorable payer mix. The metric beat the Zacks Consensus Estimate of $3.92 billion and our estimate of $3.89 billion. Nevertheless, on a same-hospital basis, net patient service revenues grew 5.6% year over year.
Adjusted EBITDA climbed 25.1% year over year to $623 million in the second quarter resulting from higher same facility revenues, favorable payer mix and prudent expense management efforts. The metric outpaced the consensus mark of $505 million and our estimate of $480.6 million. Adjusted EBITDA margin of 15.6% improved 300 bps year over year.
Ambulatory Care: The segment’s net operating revenues rose 11.3% year over year to $1.3 billion in the quarter under review on the back of improved net revenue per case growth, facility buyouts and expansion of service lines. The metric outpaced the Zacks Consensus Estimate of $1.23 billion and our estimate of $1.24 billion.
Adjusted EBITDA was $498 million, which advanced 11.4% year over year, attributable to facility buyouts and solid net revenue per case growth. The metric beat the consensus mark of $496 million but fell short of our estimate of $516.3 million. Adjusted EBITDA margin remained flat year over year at 39.2%.
THC’s Financial Position (as of June 30, 2025)
Tenet exited the second quarter with cash and cash equivalents of $2.6 billion, which declined 13.1% from the 2024-end level.
Total assets of $28.7 billion dipped 0.8% from the figure at 2024-end.
Long-term debt, net of the current portion, amounted to $13.1 billion, which inched up marginally from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $84 million.
Total shareholders’ equity of $3.7 billion decreased 10.1% from the 2024-end level.
THC generated $1.8 billion of net cash from operations in the first half of 2025, which advanced 31.4% year over year. Free cash flows improved 23.4% year over year to $743 million.
THC’s Share Repurchase Update
THC bought back common shares worth $747 million in the second quarter of 2025. Management sanctioned an increase of $1.5 billion to the share repurchase program. As of July 22, 2025, the company had a leftover share repurchase authorization of $1.8 billion.
Tenet’s Outlook
3Q25
THC expects third-quarter 2025 adjusted EBITDA to be 22.5-23.5% of its full-year 2025 adjusted EBITDA guided range.
2025
Net operating revenues are currently within $20.95-$21.25 billion, higher than the earlier view of $20.6-$21 billion. The midpoint of the revised guidance indicates 2.1% growth from the 2024 figure.
Net operating revenues of the Hospital segment are forecasted to lie between $15.95 billion and $16.1 billion, higher than the prior guidance of $15.75-$16 billion. The midpoint of the updated outlook indicates a 0.7% decline from the 2024 figure. The metric at the Ambulatory Care unit is estimated within $5-$5.15 billion, up from the previous view of $4.85-$5 billion. The midpoint of the revised guidance implies 11.9% growth from the 2024 figure.
Adjusted EBITDA is likely to remain between $4.4 billion and $4.54 billion for 2025, higher from the prior view of $3.975-$4.175 billion. The midpoint of the updated guidance indicates 11.9% growth from the 2024 figure. Adjusted EBITDA margin is estimated to be in the 21-21.4% band compared with the earlier view of 19.3-19.9%.
Adjusted net income is projected between $1.415 billion and $1.475 billion, up from the prior outlook of $1.115-$1.220 billion. Adjusted EPS is presently anticipated within $15.55-$16.21, up from the earlier view of $11.99-$13.12. The mid-point of the revised outlook implies a 33.7% rise from the 2024 figure. Interest expense is currently estimated between $815 million and $825 million.
Net cash provided by operating activities is expected between $2.75 billion and $3.1 billion. Free cash flow is estimated to remain between $2.025 billion and $2.275 billion. Capital expenditures are projected in the range of $725-$825 million.
Of the Medical sector players that have reported second-quarter 2025 results so far, the bottom-line result of Abbott Laboratories (ABT - Free Report) beat the Zacks Consensus Estimate.
Abbott Laboratories reported second-quarter 2025 adjusted EPS of $1.26, which beat the Zacks Consensus Estimate by 0.8%. The figure improved 10.5% from the prior-year quarter’s level. Worldwide sales of $11.14 billion were up 7.4% year over year on a reported basis. The top line surpassed the Zacks Consensus Estimate by 0.6%. Organically, sales improved 6.9% year over year. Organic sales, ex-COVID, rose 7.5% year over year. Segment wise, Established Pharmaceuticals’ product sales increased 6.9% on a reported basis (7.7% on an organic basis) to $1.38 billion.
In the second quarter, the Medical Devices segment’s sales rose 13.4% year over year on a reported basis (12.2% organically) to $5.37 billion. The Diabetes Care division reported organic sales growth of 19.6% year over year, led by sales of continuous glucose monitors, which accounted for $1.90 billion of total sales. Structural Heart sales rose 11.7% and Heart Failure sales improved 14% year over year organically. In the second quarter, the gross profit rose 8.9% year over year to $6.29 billion. The gross margin expanded 79 basis points (bps) to 56.4%.
Upcoming Releases
Here are two other companies from the Medical space that are likely to report their respective quarterly earnings soon.
Genmab A/S (GMAB - Free Report) has an Earnings ESP of +10.03% and a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for GMAB’s second-quarter 2025 earnings is 39 cents per share, which indicates a 77.3% surge from the prior-year quarter.
Genmab’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 14.90%.
Harmony Biosciences Holdings, Inc. (HRMY - Free Report) has an Earnings ESP of +16.35% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for HRMY’s second-quarter 2025 earnings is 80 cents per share, which indicates a four-fold increase from the year-ago quarter’s reported figure.
Harmony Biosciences’ earnings beat estimates in each of the trailing four quarters, the average surprise being 167.63%.
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Tenet Beats Q2 Earnings on Strong Patient Volumes, Hikes '25 EPS View
Key Takeaways
Tenet Healthcare Corporation (THC - Free Report) reported second-quarter 2025 adjusted earnings per share (EPS) of $4.02, which surpassed the Zacks Consensus Estimate by 41.6%. The bottom line soared 74% year over year.
Net operating revenues advanced 3.2% year over year to $5.3 billion. The top line beat the consensus mark by 2.4%.
The company’s quarterly results were aided by higher same facility revenues, favorable payer mix and improved acuity, which led to strong performance of the Hospital Operations and Services segment. Facility buyouts buoyed the performance of the Ambulatory Care segment. However, the upside was partly offset by rising operating costs—particularly supplies expense.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Tenet Healthcare Corporation price-consensus-eps-surprise-chart | Tenet Healthcare Corporation Quote
THC’s Q2 Performance
Adjusted net income of $369 million climbed 63.3% year over year in the quarter under review.
Adjusted EBITDA improved 18.6% year over year to $1.1 billion, higher than our estimate of $997 million. The year-over-year growth resulted from improved same facility revenues, higher acuity, favorable payer mix and prudent expense management efforts. Adjusted EBITDA margin of 21.3% improved 280 basis points (bps) year over year.
Total operating costs increased 2.3% year over year to $4.5 billion in the second quarter due to a higher supplies expense.
Segmental Details
Hospital Operations and Services: The segment recorded net operating revenues of $4 billion, which inched up 0.9% year over year on the back of improved same hospital admissions, higher acuity and favorable payer mix. The metric beat the Zacks Consensus Estimate of $3.92 billion and our estimate of $3.89 billion. Nevertheless, on a same-hospital basis, net patient service revenues grew 5.6% year over year.
Adjusted EBITDA climbed 25.1% year over year to $623 million in the second quarter resulting from higher same facility revenues, favorable payer mix and prudent expense management efforts. The metric outpaced the consensus mark of $505 million and our estimate of $480.6 million. Adjusted EBITDA margin of 15.6% improved 300 bps year over year.
Ambulatory Care: The segment’s net operating revenues rose 11.3% year over year to $1.3 billion in the quarter under review on the back of improved net revenue per case growth, facility buyouts and expansion of service lines. The metric outpaced the Zacks Consensus Estimate of $1.23 billion and our estimate of $1.24 billion.
Adjusted EBITDA was $498 million, which advanced 11.4% year over year, attributable to facility buyouts and solid net revenue per case growth. The metric beat the consensus mark of $496 million but fell short of our estimate of $516.3 million. Adjusted EBITDA margin remained flat year over year at 39.2%.
THC’s Financial Position (as of June 30, 2025)
Tenet exited the second quarter with cash and cash equivalents of $2.6 billion, which declined 13.1% from the 2024-end level.
Total assets of $28.7 billion dipped 0.8% from the figure at 2024-end.
Long-term debt, net of the current portion, amounted to $13.1 billion, which inched up marginally from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $84 million.
Total shareholders’ equity of $3.7 billion decreased 10.1% from the 2024-end level.
THC generated $1.8 billion of net cash from operations in the first half of 2025, which advanced 31.4% year over year. Free cash flows improved 23.4% year over year to $743 million.
THC’s Share Repurchase Update
THC bought back common shares worth $747 million in the second quarter of 2025. Management sanctioned an increase of $1.5 billion to the share repurchase program. As of July 22, 2025, the company had a leftover share repurchase authorization of $1.8 billion.
Tenet’s Outlook
3Q25
THC expects third-quarter 2025 adjusted EBITDA to be 22.5-23.5% of its full-year 2025 adjusted EBITDA guided range.
2025
Net operating revenues are currently within $20.95-$21.25 billion, higher than the earlier view of $20.6-$21 billion. The midpoint of the revised guidance indicates 2.1% growth from the 2024 figure.
Net operating revenues of the Hospital segment are forecasted to lie between $15.95 billion and $16.1 billion, higher than the prior guidance of $15.75-$16 billion. The midpoint of the updated outlook indicates a 0.7% decline from the 2024 figure. The metric at the Ambulatory Care unit is estimated within $5-$5.15 billion, up from the previous view of $4.85-$5 billion. The midpoint of the revised guidance implies 11.9% growth from the 2024 figure.
Adjusted EBITDA is likely to remain between $4.4 billion and $4.54 billion for 2025, higher from the prior view of $3.975-$4.175 billion. The midpoint of the updated guidance indicates 11.9% growth from the 2024 figure. Adjusted EBITDA margin is estimated to be in the 21-21.4% band compared with the earlier view of 19.3-19.9%.
Adjusted net income is projected between $1.415 billion and $1.475 billion, up from the prior outlook of $1.115-$1.220 billion. Adjusted EPS is presently anticipated within $15.55-$16.21, up from the earlier view of $11.99-$13.12. The mid-point of the revised outlook implies a 33.7% rise from the 2024 figure. Interest expense is currently estimated between $815 million and $825 million.
Net cash provided by operating activities is expected between $2.75 billion and $3.1 billion. Free cash flow is estimated to remain between $2.025 billion and $2.275 billion. Capital expenditures are projected in the range of $725-$825 million.
THC’s Zacks Rank
Tenet currently carries 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 have reported second-quarter 2025 results so far, the bottom-line result of Abbott Laboratories (ABT - Free Report) beat the Zacks Consensus Estimate.
Abbott Laboratories reported second-quarter 2025 adjusted EPS of $1.26, which beat the Zacks Consensus Estimate by 0.8%. The figure improved 10.5% from the prior-year quarter’s level. Worldwide sales of $11.14 billion were up 7.4% year over year on a reported basis. The top line surpassed the Zacks Consensus Estimate by 0.6%. Organically, sales improved 6.9% year over year. Organic sales, ex-COVID, rose 7.5% year over year. Segment wise, Established Pharmaceuticals’ product sales increased 6.9% on a reported basis (7.7% on an organic basis) to $1.38 billion.
In the second quarter, the Medical Devices segment’s sales rose 13.4% year over year on a reported basis (12.2% organically) to $5.37 billion. The Diabetes Care division reported organic sales growth of 19.6% year over year, led by sales of continuous glucose monitors, which accounted for $1.90 billion of total sales. Structural Heart sales rose 11.7% and Heart Failure sales improved 14% year over year organically. In the second quarter, the gross profit rose 8.9% year over year to $6.29 billion. The gross margin expanded 79 basis points (bps) to 56.4%.
Upcoming Releases
Here are two other companies from the Medical space that are likely to report their respective quarterly earnings soon.
Genmab A/S (GMAB - Free Report) has an Earnings ESP of +10.03% and a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for GMAB’s second-quarter 2025 earnings is 39 cents per share, which indicates a 77.3% surge from the prior-year quarter.
Genmab’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 14.90%.
Harmony Biosciences Holdings, Inc. (HRMY - Free Report) has an Earnings ESP of +16.35% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for HRMY’s second-quarter 2025 earnings is 80 cents per share, which indicates a four-fold increase from the year-ago quarter’s reported figure.
Harmony Biosciences’ earnings beat estimates in each of the trailing four quarters, the average surprise being 167.63%.