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THC Q1 EPS beat estimates by 14.5%, rising 10.6% YoY on solid admissions and revenue growth.
Tenet Healthcare saw ambulatory revenues jump 10.6%, boosted by acquisitions and service expansion.
THC faced margin pressure from unfavorable payer mix and rising supply and operating costs.
Tenet Healthcare Corporation (THC - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $4.82, which surpassed the Zacks Consensus Estimate by 14.5%. The bottom line increased 10.6% year over year.
Net operating revenues advanced 2.8% year over year to $5.37 billion. The top line marginally missed the consensus mark by 0.4%.
The quarterly results benefited from strong same-facility revenue growth and higher adjusted admissions, along with solid contributions from acquisitions that supported the Ambulatory Care segment. However, the upside was partly offset by an unfavorable payer mix and higher operating costs, particularly elevated supply expenses.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Adjusted net income of $422 million climbed 1.9% year over year in the quarter.
Adjusted EBITDA of $1.2 billion surpassed our estimate of $1.1 billion, driven by solid same-facility revenue growth and disciplined expense management. However, the metric dipped 0.1% year over year due to an unfavorable payer mix, reflecting lower exchange admissions. Adjusted EBITDA margin contracted 70 basis points year over year to 21.6%.
Salaries, wages and benefits increased 2.6% year over year to $2.2 billion in the first quarter, while supply costs rose 6% and net other operating expenses increased 2.9%.
Q1 Segmental Details
Ambulatory Care: The segment’s net operating revenues climbed 10.6% year over year to $1.3 billion in the quarter, driven by strong growth in consolidated same-facility net patient service revenues, contributions from facility acquisitions and an expansion of service lines. The metric topped our estimate by 2.3%.
Adjusted EBITDA was $484 million, which advanced 6.1% year over year. The metric missed our estimate by 2.6%. Adjusted EBITDA margin deteriorated 150 bps year over year to 36.7%.
Hospital Operations and Services: The segment recorded net operating revenues of $4.05 billion, which inched up 0.5% year over year driven by higher adjusted admissions, partly offset by an unfavorable payer mix. The metric missed our model estimate by 1.6%.
Adjusted EBITDA decreased 4.1% year over year to $678 million in the quarter, affected by an unfavorable payer mix. Adjusted EBITDA margin of 16.7% was down 80 bps year over year.
THC’s Financial Position (as of March 31, 2026)
Tenet Healthcare exited the first quarter with cash and cash equivalents of $2.97 billion, which improved from the 2025-end level of $2.88 billion. Total assets of $31.2 billion rose from the 2025-end figure of $29.7 billion.
Long-term debt, net of the current portion, amounted to $13.1 billion, which inched up marginally from the figure as of Dec. 31, 2025. The current portion of long-term debt totaled $81 million.
Total shareholders’ equity of $4.8 billion increased from the 2025-end level of $4.2 billion.
THC generated $1.6 billion of net cash from operations in the first quarter of 2026, which advanced 101.3% year over year. Free cash flows improved 127.6% year over year to $1.5 billion in the quarter.
THC’s Share Repurchase Update
THC bought back 1.35 million of common shares worth $318 million in the first quarter.
THC Provides Outlook for 2026
Net operating revenues are projected in the range of $21.5-$22.3 billion, unchanged from prior guidance and up from $21.3 billion in 2025. Hospital segment revenues are expected to be between $16 billion and $16.6 billion, while the Ambulatory Care unit is forecasted to generate $5.5–$5.7 billion.
Adjusted EBITDA is likely to remain between $4.485 billion and $4.785 billion in 2026, compared with the 2025 figure of $4.566 billion. Adjusted EBITDA margin is estimated to be in the 20.9-21.5% band, the mid-point of which indicates a decline from the 2025 level of 21.4%. Adjusted EPS for 2026 is anticipated to be in the band of $16.38-$18.68, up from the previous guidance of $16.19-$18.47.
Net cash provided by operating activities is now expected to be between $3.64 billion and $4.09 billion. Free cash flow is now estimated to remain between $2.94 billion and $3.29 billion. Capital expenditures are projected in the range of $700-$800 million.
Here are some stocks from the broader Medical space that have also reported their quarterly results: HCA Healthcare, Inc. (HCA - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and The Ensign Group, Inc. (ENSG - Free Report)
HCA Healthcare reported first-quarter 2026 adjusted earnings per share of $7.15, slightly below the Zacks Consensus Estimate of $7.17, though up 10.9% year over year. Revenues increased 4.3% to $19.1 billion but narrowly missed the consensus estimate by 0.1%. HCA’s performance was affected by declines in same-facility inpatient and outpatient surgeries, along with elevated operating expenses, partially offset by modest growth in emergency room visits.
UnitedHealth Group reported first-quarter 2026 adjusted earnings per share of $7.23, which surpassed the Zacks Consensus Estimate of $6.46 and increased 0.4% year over year. Revenues rose 2% to $111.7 billion and exceeded the consensus estimate by 2.1%. UNH’s performance was driven by growth in commercial fee-based membership and strength in Optum Rx, partially offset by weakness in Optum Health and a decline in risk-based membership.
Ensign Group reported a first-quarter 2026 adjusted EPS of $1.85, which beat the Zacks Consensus Estimate by 3.4%. The bottom line improved 21.7% year over year. Operating revenues advanced 18.4% year over year to $1.4 billion. The top line marginally missed the consensus mark by 0.07%. ENSG’s strong performance was driven by higher occupancy, patient days and contributions from newly acquired and transitioning facilities, along with growth in rental income. However, these gains were partly offset by increased expenses.
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THC Beats Q1 Earnings Estimates on Strong Ambulatory Growth, Ups '26 EPS View
Key Takeaways
Tenet Healthcare Corporation (THC - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $4.82, which surpassed the Zacks Consensus Estimate by 14.5%. The bottom line increased 10.6% year over year.
Net operating revenues advanced 2.8% year over year to $5.37 billion. The top line marginally missed the consensus mark by 0.4%.
The quarterly results benefited from strong same-facility revenue growth and higher adjusted admissions, along with solid contributions from acquisitions that supported the Ambulatory Care segment. However, the upside was partly offset by an unfavorable payer mix and higher operating costs, particularly elevated supply expenses.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Tenet Healthcare Corporation price-consensus-eps-surprise-chart | Tenet Healthcare Corporation Quote
Inside THC’s Q1 Performance
Adjusted net income of $422 million climbed 1.9% year over year in the quarter.
Adjusted EBITDA of $1.2 billion surpassed our estimate of $1.1 billion, driven by solid same-facility revenue growth and disciplined expense management. However, the metric dipped 0.1% year over year due to an unfavorable payer mix, reflecting lower exchange admissions. Adjusted EBITDA margin contracted 70 basis points year over year to 21.6%.
Salaries, wages and benefits increased 2.6% year over year to $2.2 billion in the first quarter, while supply costs rose 6% and net other operating expenses increased 2.9%.
Q1 Segmental Details
Ambulatory Care: The segment’s net operating revenues climbed 10.6% year over year to $1.3 billion in the quarter, driven by strong growth in consolidated same-facility net patient service revenues, contributions from facility acquisitions and an expansion of service lines. The metric topped our estimate by 2.3%.
Adjusted EBITDA was $484 million, which advanced 6.1% year over year. The metric missed our estimate by 2.6%. Adjusted EBITDA margin deteriorated 150 bps year over year to 36.7%.
Hospital Operations and Services: The segment recorded net operating revenues of $4.05 billion, which inched up 0.5% year over year driven by higher adjusted admissions, partly offset by an unfavorable payer mix. The metric missed our model estimate by 1.6%.
Adjusted EBITDA decreased 4.1% year over year to $678 million in the quarter, affected by an unfavorable payer mix. Adjusted EBITDA margin of 16.7% was down 80 bps year over year.
THC’s Financial Position (as of March 31, 2026)
Tenet Healthcare exited the first quarter with cash and cash equivalents of $2.97 billion, which improved from the 2025-end level of $2.88 billion. Total assets of $31.2 billion rose from the 2025-end figure of $29.7 billion.
Long-term debt, net of the current portion, amounted to $13.1 billion, which inched up marginally from the figure as of Dec. 31, 2025. The current portion of long-term debt totaled $81 million.
Total shareholders’ equity of $4.8 billion increased from the 2025-end level of $4.2 billion.
THC generated $1.6 billion of net cash from operations in the first quarter of 2026, which advanced 101.3% year over year. Free cash flows improved 127.6% year over year to $1.5 billion in the quarter.
THC’s Share Repurchase Update
THC bought back 1.35 million of common shares worth $318 million in the first quarter.
THC Provides Outlook for 2026
Net operating revenues are projected in the range of $21.5-$22.3 billion, unchanged from prior guidance and up from $21.3 billion in 2025. Hospital segment revenues are expected to be between $16 billion and $16.6 billion, while the Ambulatory Care unit is forecasted to generate $5.5–$5.7 billion.
Adjusted EBITDA is likely to remain between $4.485 billion and $4.785 billion in 2026, compared with the 2025 figure of $4.566 billion. Adjusted EBITDA margin is estimated to be in the 20.9-21.5% band, the mid-point of which indicates a decline from the 2025 level of 21.4%. Adjusted EPS for 2026 is anticipated to be in the band of $16.38-$18.68, up from the previous guidance of $16.19-$18.47.
Net cash provided by operating activities is now expected to be between $3.64 billion and $4.09 billion. Free cash flow is now estimated to remain between $2.94 billion and $3.29 billion. Capital expenditures are projected in the range of $700-$800 million.
Tenet Healthcare currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Did Other Medical Companies Perform?
Here are some stocks from the broader Medical space that have also reported their quarterly results: HCA Healthcare, Inc. (HCA - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and The Ensign Group, Inc. (ENSG - Free Report)
HCA Healthcare reported first-quarter 2026 adjusted earnings per share of $7.15, slightly below the Zacks Consensus Estimate of $7.17, though up 10.9% year over year. Revenues increased 4.3% to $19.1 billion but narrowly missed the consensus estimate by 0.1%. HCA’s performance was affected by declines in same-facility inpatient and outpatient surgeries, along with elevated operating expenses, partially offset by modest growth in emergency room visits.
UnitedHealth Group reported first-quarter 2026 adjusted earnings per share of $7.23, which surpassed the Zacks Consensus Estimate of $6.46 and increased 0.4% year over year. Revenues rose 2% to $111.7 billion and exceeded the consensus estimate by 2.1%. UNH’s performance was driven by growth in commercial fee-based membership and strength in Optum Rx, partially offset by weakness in Optum Health and a decline in risk-based membership.
Ensign Group reported a first-quarter 2026 adjusted EPS of $1.85, which beat the Zacks Consensus Estimate by 3.4%. The bottom line improved 21.7% year over year. Operating revenues advanced 18.4% year over year to $1.4 billion. The top line marginally missed the consensus mark by 0.07%. ENSG’s strong performance was driven by higher occupancy, patient days and contributions from newly acquired and transitioning facilities, along with growth in rental income. However, these gains were partly offset by increased expenses.