Tenet Q1 Operating Revenue Down Year-Over-Year

The insurer improved its 2018 outlook despite a dip in operating revenues and free cash flow.  

Tenet Healthcare Corp. released its first-quarter earnings report Monday, with an overall net operating revenue of $4.7 billion, down 2.4% from $4.8 billion during the first quarter of 2017.

Operating revenues from hospital operations were $3.9 billion, down 4.1% year-over-year. Tenet attributed this decline to "divestitures and a decline in health plan revenues."

Despite the dip in revenue and despite having posted more than $700 million in losses last year, the organization managed to turn $99 million this quarter in net income available to common shareholders.

"The actions we have taken to be a more efficient, agile and decisive organization have resulted in stronger financial performance," Ronald Rittenmeyer, CEO of Tenet, said in a statement. "We are continuing our focus on improving quality, growth and financial results and will be exploring additional opportunities to enhance margins and shareholder returns."

The organization also reported an operating income of $517 million, net income from continuing operations available to shareholders of $98 million compared to a net loss of $52 million. Tenet's cash provided by operating activities totalled $113 million, with a free cash flow loss of $30 million and an adjusted free cash flow of $4 million.

Despite some of the numbers looking shaky, Tenet increased its overall outlook for 2018.

The organization raised its projected net income from continuing operations attributable to common shareholders from $105 million to $180 million, diluted earnings per share from continuing operations from $1.02 to $1.75, and adjusted diluted earnings per share from continuing operations from $1.36 to $1.70.

Below are highlights from Tenet's first quarter earnings report:

• Same-hospital net patient revenue grew 6.7%.

• Ambulatory care same-facility system-wide revenue grew 2.7%.

• Conifer Health Solutions, Tenet's revenue cycle management subsidiary, increased its revenue to $404 million.

• Revenue per adjusted admission increased 6% in the first quarter.

• Tenet posted earnings of $0.95 per diluted share compared to a net loss of $0.52 per diluted share this time last year.

• After adjusting for certain items, which totaled $39 million, or $0.38 per share, the organization reported adjusted diluted earnings per share from continuing operations of $0.57 compared to an adjusted diluted loss per share of $0.27 this time last year.

• Same-hospital exchange outpatient visits rose 11.4% compared to the first quarter of 2017, and same-hospital exchange admissions declined 1.1 percent year-over-year.