Tenet Doubles Adjusted Net Income But Net Loss Hits $233M

The Dallas-based for-profit hospital operator also completed a $4.2 billion debt refinancing, increasing its borrowing capacity by $1.5 billion.

Tenet Healthcare Corp. doubled its adjusted net income to $61 million in Q3 but saw its net loss reach $233 million, according to its latest earnings report released Monday afternoon. 

The company reported an adjusted EBITDA of $631 million, up 9.4% year-over-year, while its net operating revenues from the hospital operations segment increased 2.3%. 

The Dallas-based for-profit hospital operator also completed a $4.2 billion debt refinancing, increasing its borrowing capacity by $1.5 billion.

Related: Tenet Posts Modest Gains in Q2, Conifer Revenues Dip 8%

Tenet's stock reacted positively to the earnings report, trading up more than 3.5% in the after-hours session. 

C-SUITE PERSPECTIVE:

"We had a very positive third quarter with performance improvement in each of our operating segments. For the third consecutive quarter, our hospitals delivered accelerating volume growth and we generated strong results at both USPI and Conifer," Ronald Rittenmeyer, CEO of Tenet, said in a statement. "In addition to driving improvements in our financial results, we made continued steady progress on many of the core initiatives we established for 2019 and discussed at the beginning of the year, including cost savings, physician recruitment, ambulatory acquisitions, marketing and board refreshment. We exceeded the midpoint of our Adjusted EBITDA Outlook in seven of the last eight quarters and exceeded the midpoint of our Adjusted EPS Outlook for eight consecutive quarters. While we have more to accomplish, we have established a solid foundation for growth and performance."   

Surgeries increased 3.2% including procedures that occurred at a USPI facility, and increased 1.2% on a same-hospital basis.

Meanwhile, Tenet's subsidiary Conifer Health Solutions saw its total revenues fall by $25 million, though its adjusted EBITDA rose $9 million. 

Related: 3 Strategic Differences Between Nonprofit and For-Profit Hospitals

Despite shedding three hospitals year-over-year, Tenet's total admissions increased 1.1% during that period of time. The company's admissions through the emergency department experienced the largest growth of an segment at 3.6%, though charity care as a percentage of total admissions fell slightly.

The company's net operating revenues from ambulatory care grew to $522 million, an increase of $20 million year-over-year. 

Tenet's cash and cash equivalents grew by $70 million quarter-over-quarter, totaling $314 million at the end of Q3.

For its year-end guidance, Tenet expects its revenues in a range of $18.35 billion to $18.55 billion, an adjusted EBITDA between $2.65 billion to $2.75 billion, and adjusted earnings per share of $2.25 to $2.91.

ADDITIONAL TENET Q3 EARNINGS REPORT HIGHLIGHTS:

• Total outpatient visits fell once again, this time by 2.8%.
• Net patient service revenues increased in Tenet's managed care, uninsured, and indemnity segments, but fell in both the Medicare and Medicaid segments. 
• Total selected operating expenses fell by $9 million.

For complete financial information, review Tenet's filing with the Securities and Exchange Commission.