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Tenet Healthcare (THC) Q4 Earnings & Revenues Top Estimates
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Tenet Healthcare Corporation (THC - Free Report) reported fourth-quarter 2017 adjusted net income of $1.40 per share, surpassing the Zacks Consensus Estimate of $1.30 by 7.7%. The bottom line also rose from 23 cents in the year-ago period.
The company’s fourth-quarter results were strong across its business segments on the back of volume growth in its hospital and Ambulatory segments, prudent cost management as well as strong financial results at USPI and Conifer segments.
Including non-cash partial write-down of the company’s deferred tax assets due to reduction in the corporate federal income tax rate, pre-tax impairment and restructuring charge and other items, the company reported net loss of $2.28 per share, comparing unfavorably with net loss of 79 cents a year ago.
Fourth-quarter net operating revenues came in at $4,978 million, up 2.4% from the prior-year quarter. The top line also beat the Zacks Consensus Estimate by 1.7%.
Full-Year Updates
For 2017, the company reported net loss of $7, much wider than the net loss of $1.88 in the year-earlier quarter.
For 2017, the company reported net operating revenues of $19,179 million, down 2.3% year over year.
Quarterly Operational Update
Tenet Healthcare’s same-hospital exchange admissions were 4,857 in the fourth quarter, up 0.2% year over year.
Same-hospital exchange outpatient visits were 51,451 in the reported quarter, up 15.2% from the comparable quarter, last year.
Tenet Healthcare’s provision for doubtful accounts was $325 million, representing a ratio of 6.1% of revenues before bad debt compared with $354 million in the prior-year quarter or 6.9% of revenues before bad debt. The increase in bad-debt ratio was primarily attributable to a $15-million decrease in same-hospital self-pay revenues, revenue growth in Ambulatory segment, the sale of Houston hospitals in 2017 and full-year California Provider Fee revenues recorded in the fourth quarter of 2017.
Total operating expenses were $4.5 billion, down 1.8% year over year due to a decline in salaries, wages and benefits plus depreciation and amortization costs.
Quarterly Segment Details:
Hospital & Other
Net operating revenues in the Hospital Operations and Other segment increased 3.4% from $4.2 billion a year ago.
On a same-hospital basis, patient revenues were $4.1 billion, up 6.1% from fourth-quarter 2016.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $538 million, up 36.2% year over year.
Ambulatory Segment:
The Ambulatory segment generated net operating revenues of $545 million, up 14% year over year.
In addition, the segment reported adjusted EBITDA of $223 million, up 22% year over year.
Conifer Segment:
Conifer’s revenues decreased 2% from the prior-year quarter to $394 million.
The segment reported $79 million of adjusted EBITDA in the quarter under review, up 9.7% year over year.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
As of Dec 31, 2017, Tenet Healthcare had cash and cash equivalents of $611 million, down 14.7% from year-end 2016.
The company exited the fourth quarter with $14.8 billion of long-term debt, down 1.8% from year-end 2016.
Net cash provided by operating activities for 2017 was $1200 million, representing a 115% increase from $558 million in 2016.
2018 Outlook
Adjusted earnings per share are projected between 73 cents and $1.07, up from the earlier projection of 58-97 cents.
Tenet Healthcare forecasts revenues in the range of $17.9-$18.3 billion, up from the previously guided range of $17.8-$18.2 billion.
Adjusted EBITDA is expected between $2.5 billion and $2.6 billion.
Tenet Healthcare estimates adjusted free cash flow of $675-$875 million. It also anticipates net cash provided by operating activities between $1.245 billion and $1.450 billion.
First-Quarter 2018 Outlook
The company predicts revenues in the range of $4.45-$4.65 billion.
It expects adjusted EBITDA between $580 million and $630 million.
Net income from continuing operations is likely to be between $50 million and $70 million.
Adjusted earnings per share from continuing operations are expected to range from a loss of 10 cents to earnings of 5 cents.
Among other firms in the medical sector having reported fourth-quarter earnings so far, the bottom line of Centene Corp. (CNC - Free Report) , Aetna Inc and Anthem, Inc surpassed the respective Zacks Consensus Estimate.
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Tenet Healthcare (THC) Q4 Earnings & Revenues Top Estimates
Tenet Healthcare Corporation (THC - Free Report) reported fourth-quarter 2017 adjusted net income of $1.40 per share, surpassing the Zacks Consensus Estimate of $1.30 by 7.7%. The bottom line also rose from 23 cents in the year-ago period.
The company’s fourth-quarter results were strong across its business segments on the back of volume growth in its hospital and Ambulatory segments, prudent cost management as well as strong financial results at USPI and Conifer segments.
Including non-cash partial write-down of the company’s deferred tax assets due to reduction in the corporate federal income tax rate, pre-tax impairment and restructuring charge and other items, the company reported net loss of $2.28 per share, comparing unfavorably with net loss of 79 cents a year ago.
Fourth-quarter net operating revenues came in at $4,978 million, up 2.4% from the prior-year quarter. The top line also beat the Zacks Consensus Estimate by 1.7%.
Full-Year Updates
For 2017, the company reported net loss of $7, much wider than the net loss of $1.88 in the year-earlier quarter.
For 2017, the company reported net operating revenues of $19,179 million, down 2.3% year over year.
Quarterly Operational Update
Tenet Healthcare’s same-hospital exchange admissions were 4,857 in the fourth quarter, up 0.2% year over year.
Same-hospital exchange outpatient visits were 51,451 in the reported quarter, up 15.2% from the comparable quarter, last year.
Tenet Healthcare’s provision for doubtful accounts was $325 million, representing a ratio of 6.1% of revenues before bad debt compared with $354 million in the prior-year quarter or 6.9% of revenues before bad debt. The increase in bad-debt ratio was primarily attributable to a $15-million decrease in same-hospital self-pay revenues, revenue growth in Ambulatory segment, the sale of Houston hospitals in 2017 and full-year California Provider Fee revenues recorded in the fourth quarter of 2017.
Total operating expenses were $4.5 billion, down 1.8% year over year due to a decline in salaries, wages and benefits plus depreciation and amortization costs.
Quarterly Segment Details:
Hospital & Other
Net operating revenues in the Hospital Operations and Other segment increased 3.4% from $4.2 billion a year ago.
On a same-hospital basis, patient revenues were $4.1 billion, up 6.1% from fourth-quarter 2016.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $538 million, up 36.2% year over year.
Ambulatory Segment:
The Ambulatory segment generated net operating revenues of $545 million, up 14% year over year.
In addition, the segment reported adjusted EBITDA of $223 million, up 22% year over year.
Conifer Segment:
Conifer’s revenues decreased 2% from the prior-year quarter to $394 million.
The segment reported $79 million of adjusted EBITDA in the quarter under review, up 9.7% year over year.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Tenet Healthcare Corporation Price, Consensus and EPS Surprise | Tenet Healthcare Corporation Quote
Financial Position
As of Dec 31, 2017, Tenet Healthcare had cash and cash equivalents of $611 million, down 14.7% from year-end 2016.
The company exited the fourth quarter with $14.8 billion of long-term debt, down 1.8% from year-end 2016.
Net cash provided by operating activities for 2017 was $1200 million, representing a 115% increase from $558 million in 2016.
2018 Outlook
Adjusted earnings per share are projected between 73 cents and $1.07, up from the earlier projection of 58-97 cents.
Tenet Healthcare forecasts revenues in the range of $17.9-$18.3 billion, up from the previously guided range of $17.8-$18.2 billion.
Adjusted EBITDA is expected between $2.5 billion and $2.6 billion.
Tenet Healthcare estimates adjusted free cash flow of $675-$875 million. It also anticipates net cash provided by operating activities between $1.245 billion and $1.450 billion.
First-Quarter 2018 Outlook
The company predicts revenues in the range of $4.45-$4.65 billion.
It expects adjusted EBITDA between $580 million and $630 million.
Net income from continuing operations is likely to be between $50 million and $70 million.
Adjusted earnings per share from continuing operations are expected to range from a loss of 10 cents to earnings of 5 cents.
Zacks Rank and Performance of Other Insurers
Tenet Healthcare carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other firms in the medical sector having reported fourth-quarter earnings so far, the bottom line of Centene Corp. (CNC - Free Report) , Aetna Inc and Anthem, Inc surpassed the respective Zacks Consensus Estimate.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>