Tenet Healthcare Corp THC will report third-quarter results after market closes on Nov 6, 2017.
Last quarter the company’s loss came in line with the Zacks Consensus Estimate. This underperformance primarily stemmed from a decline in California Provider Fee revenues reduced electronic health record incentives. Let us see how things are shaping for this quarter.
Factors to Consider
The Zacks Rank #3 (Hold) company’s third-quarter earnings are likely to be affected by lower revenues and higher expenses associated with hurricanes Harvey and Irma. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Moreover, along with other hospital companies like Universal Health Services, Inc UHS, HCA Holdings, Inc HCA and LifePoint Health Inc LPNT that have reported so far, Tenet Healthcare’s earnings are likely to reflect the industry-wide softness in volumes.
Factors such as payor initiatives to move volumes away from hospitals, rising deductibles and prevalence of high deductible health plans, increased proportion of hospital care to be paid by consumers are driving away volumes and the same is likely to be seen in the quarter. These might result in lower admissions leading to a decline in patient revenues.
Admissions also must have been adversely affected by the hurricanes that tore into parts of United States. However, the company’s Ambulatory segment has been performing well over past many quarters. Tenet Healthcare expects third-quarter revenues to benefit from the segment’s performance.
Tenet Healthcare’s cost management program comprised primarily of headcount reductions and the renegotiation of contracts with suppliers and vendors. Its enterprise-wide cost reduction initiatives are likely to reduce the level of expenses and favor margins.
Further, shares bought back by the company in the third quarter will aid the bottom line.
Tenet Healthcare Corporation Price and EPS Surprise
Preliminary Results
Recently, the company announced preliminary results for the to-be-reported quarter. It expects to report revenues of approximately $4.6 billion, down 3% year over year.
Adjusted EBITDA is projected to be approximately $507 million, down 11% year over year. For the third quarter, adjusted EBITDA is likely to be negatively impacted by lower revenues and higher expenses associated with Harvey and Irma, lower-than-anticipated revenues from the Texas Medicaid Waiver program and the Florida Medicaid program.
Tenet Healthcare expects to report an adjusted net loss of approximately $17 million, or 17 cents per diluted share. This compares unfavorably with adjusted earnings of 16 cents per share generated in the year-ago quarter.
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