Tenet Tops Q2 Views, Shares Rise

Shares of

surged over 2 percent in after-hours trading after the company reported better-than-expected earnings for the second quarter. The Dallas, Texas-based company reported a quarterly loss of $61 million, or $0.61 per share, versus a year-ago loss of $26 million, or $0.27 per share, in the year-ago period. Excluding one-time items, Tenet's earnings came in at $0.75 per share. Its sales climbed to $4.49 billion from $4.04 billion. However, analysts were expecting earnings of $0.44 per share on revenue of $4.40 billion. The average estimate among 16 Estimize users was for earnings of $0.53 per share and revenue of $4.38 billion. Hospital segment patient revenue climbed 6.9% on a same-hospital basis, while admissions rose 1.7 percent. Ambulatory segment revenue gained 6.9 percent in the quarter on a pro forma same-facility system-wide basis. Its adjusted EBITDA climbed 23.5 percent year-over-year to $568 million for the second quarter. At June 30, 2015, the company had $299 million in cash and cash equivalents, versus $193 million at December 31, 2014. "This was another strong quarter for Tenet with EBITDA that exceeded our expectations," said Trevor Fetter, chairman and chief executive officer. "We continued to focus on aggressive implementation of our strategy to improve care delivery and more closely align our business with key trends shaping the healthcare system. In our hospital business, we made progress on multiple strategic partnerships that will help us achieve leadership positions in our markets, as well as plans to divest facilities." For 2015, Tenet projects adjusted earnings of $1.32 to $2.21 per share on net operating revenue of $18.1 billion to $18.5 billion. For the third quarter, Tenet projects adjusted earnings of $0.05 to $0.49 per share on net operating revenue of $4.65 billion to $4.85 billion. Tenet shares rose 2.27 percent to $58.00 in the after-hours trading session.