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Tenet Healthcare (THC) Q4 Earnings Beat Estimates, Down Y/Y
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Tenet Healthcare Corporation (THC - Free Report) delivered fourth-quarter 2018 adjusted net earnings of 51 cents per share, outperforming the Zacks Consensus Estimate by 112.5%. However, the same declined 63.6% year over year mainly due to fall in operating revenues.
Quarterly Operational Update
Net operating revenues were $4.6 billion, down 7.2% year over year due to poor performances by Conifer, and Hospital and other segments. However, the top line beat the Zacks Consensus Estimate by 2.9%.
Total visits for the company decreased 8.8% to 1734.4 billion in the fourth quarter of 2018.
It reported net loss from continuing operations of $5 million, narrower than the year-ago quarter’s net loss of $230 million. In the quarter under review, Adjusted EBITDA was 684 million, down 18.6% year over year.
Full-Year Highlights
Net operating revenues for 2018 declined 4.5% year over year to $18.3 billion.
The company witnessed net loss from continuing operations of 5 cents per share, narrower than net loss of $2.28 in the year-ago quarter.
Quarterly Segmental Details
Hospital & Other
Net operating revenues for the Hospital Operations and Other segment totaled $3.8 billion, down 8.4% year over year. This downside was largely attributable to hospital divestitures, partially offset by same hospital revenue growth.
On a same-hospital basis, net patient revenues were $3.5 billion, down 1.3% year over year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $352 million, down 34.6% year over year.
Ambulatory
The Ambulatory segment generated net operating revenues of $554 million, up 1.7% year over year.
Additionally, the segment reported adjusted EBITDA of $245 million, up 9.9% year over year.
Conifer
Conifer’s revenues decreased 5.6% from the prior-year quarter’s level to $372 million. This was mainly due to the company’s divestment activities.
The segment reported $87 million of adjusted EBITDA in the quarter under review, up 10.1% year over year.
Financial Position
As of Dec 31, 2018, Tenet Healthcare had cash and cash equivalents of $411 million, down 32.7% from the number at the end of 2017.
The company exited the fourth quarter with $182 million of long-term debt, up 24.6% from the count at 2017 end.
For 2018, net cash provided by operating activities was $1049 million, up 12.6% year over year.
2019 Outlook
Tenet Healthcare expects revenues of $18.0-$18.4 billion.
Net income from continuing operations for 2019 is projected to be between $15 million and $115 million.
Adjusted EBITDA is estimated between $2.65 billion and $2.75 billion.
Tenet Healthcare projects adjusted free cash flow of $600-$800 million.
The company expects net cash provided by operating activities of $1.07-$1.375 billion.
Adjusted diluted earnings per share from continuing operations are projected between $2.08 and $2.59.
It also assumes interest expense to be $985-$995 million.
First-Quarter 2019 Outlook
Revenues are expected to be between $4.3 billion and $4.6 billion.
Net loss from continuing operations is expected to be between $25 million and $70 million.
Adjusted EBITDA is estimated to be between $575 million and $625 million.
Adjusted diluted earnings per share from continuing operations are expected to be 10-43 cents.
The company expects interest expenses to be $250-$260 million in the first quarter.
Among other players from the HMO industry having reported fourth-quarter earnings so far, the bottom lines of Anthem Inc. , Centene Corporation (CNC - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) have surpassed the respective Zacks Consensus Estimate.
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Tenet Healthcare (THC) Q4 Earnings Beat Estimates, Down Y/Y
Tenet Healthcare Corporation (THC - Free Report) delivered fourth-quarter 2018 adjusted net earnings of 51 cents per share, outperforming the Zacks Consensus Estimate by 112.5%. However, the same declined 63.6% year over year mainly due to fall in operating revenues.
Quarterly Operational Update
Net operating revenues were $4.6 billion, down 7.2% year over year due to poor performances by Conifer, and Hospital and other segments. However, the top line beat the Zacks Consensus Estimate by 2.9%.
Total visits for the company decreased 8.8% to 1734.4 billion in the fourth quarter of 2018.
It reported net loss from continuing operations of $5 million, narrower than the year-ago quarter’s net loss of $230 million. In the quarter under review, Adjusted EBITDA was 684 million, down 18.6% year over year.
Full-Year Highlights
Net operating revenues for 2018 declined 4.5% year over year to $18.3 billion.
The company witnessed net loss from continuing operations of 5 cents per share, narrower than net loss of $2.28 in the year-ago quarter.
Quarterly Segmental Details
Hospital & Other
Net operating revenues for the Hospital Operations and Other segment totaled $3.8 billion, down 8.4% year over year. This downside was largely attributable to hospital divestitures, partially offset by same hospital revenue growth.
On a same-hospital basis, net patient revenues were $3.5 billion, down 1.3% year over year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $352 million, down 34.6% year over year.
Ambulatory
The Ambulatory segment generated net operating revenues of $554 million, up 1.7% year over year.
Additionally, the segment reported adjusted EBITDA of $245 million, up 9.9% year over year.
Conifer
Conifer’s revenues decreased 5.6% from the prior-year quarter’s level to $372 million. This was mainly due to the company’s divestment activities.
The segment reported $87 million of adjusted EBITDA in the quarter under review, up 10.1% year over year.
Financial Position
As of Dec 31, 2018, Tenet Healthcare had cash and cash equivalents of $411 million, down 32.7% from the number at the end of 2017.
The company exited the fourth quarter with $182 million of long-term debt, up 24.6% from the count at 2017 end.
For 2018, net cash provided by operating activities was $1049 million, up 12.6% year over year.
2019 Outlook
Tenet Healthcare expects revenues of $18.0-$18.4 billion.
Net income from continuing operations for 2019 is projected to be between $15 million and $115 million.
Adjusted EBITDA is estimated between $2.65 billion and $2.75 billion.
Tenet Healthcare projects adjusted free cash flow of $600-$800 million.
The company expects net cash provided by operating activities of $1.07-$1.375 billion.
Adjusted diluted earnings per share from continuing operations are projected between $2.08 and $2.59.
It also assumes interest expense to be $985-$995 million.
First-Quarter 2019 Outlook
Revenues are expected to be between $4.3 billion and $4.6 billion.
Net loss from continuing operations is expected to be between $25 million and $70 million.
Adjusted EBITDA is estimated to be between $575 million and $625 million.
Adjusted diluted earnings per share from continuing operations are expected to be 10-43 cents.
The company expects interest expenses to be $250-$260 million in the first quarter.
Zacks Rank and Performance of Other Players
Tenet Healthcare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players from the HMO industry having reported fourth-quarter earnings so far, the bottom lines of Anthem Inc. , Centene Corporation (CNC - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) have surpassed the respective Zacks Consensus Estimate.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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