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Tenet Healthcare Corporation (THC - Free Report) delivered first-quarter 2020 adjusted net earnings of $1.28 per share, beating the Zacks Consensus Estimate by 433.3%. Further, the bottom line soared 113.3% year over year, mainly owing to operational performance in its business segments along with a favourable income tax benefit.
The results were partly offset by a decline in patient volumes in the last two weeks of March due to government order and cancellation of elective surgery following the COVID-19 outbreak.
Quarterly Operational Update
Net operating revenues of $4.5 billion slid 0.6% year over year due to lower contribution by Hospital operations and Conifer segments. Moreover, the top line missed the Zacks Consensus Estimate by 2.2% due to decline in surgeries.
The company reported net income from continuing operations of $94 million against the year-ago quarter’s net loss of $20 million. In the quarter under review, adjusted EBITDA was $585 million, down 6.1% year over year.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Net operating revenues for the Hospital Operations and Other segment totaled $3.8 billion, down 0.7% year over year. This was due to the impact of coronavirus, which intensified in March 2020.
On a same-hospital basis, net patient revenues were $3.54 billion, down 0.4% year over year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $342 million slipped 1.4% year over year.
Ambulatory
The Ambulatory segment generated net operating revenues of $490 million, up 2.1% year over year.
Additionally, the segment reported adjusted EBITDA of $156 million, down 11.9% year over year.
Conifer
Conifer’s revenues decreased 4.9% from the prior-year quarter to $332 million. This was primarily due to client attrition as a result of hospital divestitures by both Tenet and other customers.
The segment reported $87 million of adjusted EBITDA in the quarter under review, down 12.1% year over year.
The company is working on spinning off its Conifer segment.
Financial Position
As of Mar 31, 2020, Tenet Healthcare had cash and cash equivalents of $613 million, up 134% from the level at 2019 end.
The company exited the first quarter with $15.1 billion of long-term debt, up 3.4% from the level at 2019 end.
For the first quarter, net cash provided by operating activities was $129 million compared with $10 million in the year-ago period.
Of the medical sector players that reported first-quarter results so far, UnitedHealth Group Incorporated’s bottom line (UNH - Free Report) beat the Zacks Consensus Estimate while earnings of Centene Corporation (CNC - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) missed the mark.
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Tenet Healthcare (THC) Q1 Earnings Beat Estimates, Rise Y/Y
Tenet Healthcare Corporation (THC - Free Report) delivered first-quarter 2020 adjusted net earnings of $1.28 per share, beating the Zacks Consensus Estimate by 433.3%. Further, the bottom line soared 113.3% year over year, mainly owing to operational performance in its business segments along with a favourable income tax benefit.
The results were partly offset by a decline in patient volumes in the last two weeks of March due to government order and cancellation of elective surgery following the COVID-19 outbreak.
Quarterly Operational Update
Net operating revenues of $4.5 billion slid 0.6% year over year due to lower contribution by Hospital operations and Conifer segments. Moreover, the top line missed the Zacks Consensus Estimate by 2.2% due to decline in surgeries.
The company reported net income from continuing operations of $94 million against the year-ago quarter’s net loss of $20 million. In the quarter under review, adjusted EBITDA was $585 million, down 6.1% year over year.
Tenet Healthcare Corporation Price, Consensus and EPS Surprise
Tenet Healthcare Corporation price-consensus-eps-surprise-chart | Tenet Healthcare Corporation Quote
Quarterly Segmental Details
Hospital & Other
Net operating revenues for the Hospital Operations and Other segment totaled $3.8 billion, down 0.7% year over year. This was due to the impact of coronavirus, which intensified in March 2020.
On a same-hospital basis, net patient revenues were $3.54 billion, down 0.4% year over year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $342 million slipped 1.4% year over year.
Ambulatory
The Ambulatory segment generated net operating revenues of $490 million, up 2.1% year over year.
Additionally, the segment reported adjusted EBITDA of $156 million, down 11.9% year over year.
Conifer
Conifer’s revenues decreased 4.9% from the prior-year quarter to $332 million. This was primarily due to client attrition as a result of hospital divestitures by both Tenet and other customers.
The segment reported $87 million of adjusted EBITDA in the quarter under review, down 12.1% year over year.
The company is working on spinning off its Conifer segment.
Financial Position
As of Mar 31, 2020, Tenet Healthcare had cash and cash equivalents of $613 million, up 134% from the level at 2019 end.
The company exited the first quarter with $15.1 billion of long-term debt, up 3.4% from the level at 2019 end.
For the first quarter, net cash provided by operating activities was $129 million compared with $10 million in the year-ago period.
Zacks Rank
Tenet Healthcare has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the medical sector players that reported first-quarter results so far, UnitedHealth Group Incorporated’s bottom line (UNH - Free Report) beat the Zacks Consensus Estimate while earnings of Centene Corporation (CNC - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) missed the mark.
Breakout Biotech Stocks with Triple-Digit Profit Potential
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 +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>