Tenet Healthcare (THC) Tops Q1 EPS by 12c; Provides Q2, FY16 Guidance

Tenet Healthcare (NYSE: THC) reported Q1 EPS of $0.45, $0.12 better than the analyst estimate of $0.33. Revenue for the quarter came in at $4.4 billion versus the consensus estimate of $4.78 billion.

• Generated Adjusted EBITDA of $613 million, a $0.56 loss per share from continuing operations, and, after adjusting for certain items, Adjusted diluted EPS of $0.45 during the first quarter of 2016.
• Same-hospital patient revenue grew 6.0% in the first quarter, driven by 2.2% growth in adjusted admissions and 3.7% growth in revenue per adjusted admission. Hospital segment Adjusted EBITDA totaled $414 million.
• Ambulatory segment revenue increased 11.0% on a pro forma same-facility system-wide basis in the first quarter, with cases increasing 8.6% and revenue per case increasing 2.2%. Adjusted EBITDA for the ambulatory segment was $136 million, a 44.7% increase on a pro forma basis.
• Revenue from Conifer Health Solutions increased 12.6% in the first quarter with revenue from third parties increasing 19.8%. Conifer generated $63 million of Adjusted EBITDA in the first quarter, representing a margin of 16.4%.
• Net cash provided by operating activities was $147 million, a $204 million improvement when compared to $57 million of cash used by operating activities in the first quarter of 2015. Adjusted Free Cash Flow was $11 million in the first quarter of 2016, a $215 million increase when compared to a $204 million outflow in the first quarter of 2015.
• The results for the first quarter of 2016 include $173 million of litigation and investigation costs which are described further below.
• Reiterated 2016 Outlook, which includes Adjusted EBITDA of $2.4 billion to $2.5 billion.

GUIDANCE:

Tenet Healthcare sees FY2016 EPS of $1.18-$2.25, versus the consensus of $1.84. Tenet Healthcare sees FY2016 revenue of $18.8-19.2 billion, versus the consensus of $19.11 billion. Adjusted EBITDA of $2.4 billion to $2.5 billion.

For Q2, Tenet Healthcare sees ES of $0.20-$0.73, versus the consensus of $0.52. The company sees Q2 revenue of $4.8-$5 billion, versus the consensus of $4.7 billion.

For earnings history and earnings-related data on Tenet Healthcare (THC) click here.

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