Tenet's profit misses analysts' estimates on costs

, Bloomberg

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Tenet Healthcare Corp., the third- largest U.S. hospital company, reported fourth-quarter income helped by higher admissions and reaffirmed its 2013 forecast.

Adjusted earnings before interest, taxes, depreciation and amortization of $336 million beat analysts' estimates and the company's forecast, Dallas-based Tenet said Tuesday in a statement. Earnings excluding one-time items were 52 cents a share, 15 cents lower than the average of 19 analysts' estimates compiled by Bloomberg.

Revenue climbed 7.3 percent to $2.33 billion, as adjusted admissions rose 2.9 percent and outpatient visits increased 7.3 percent. Tenet operates 49 hospitals in 10 states, including Florida, Texas and California, and 117 outpatient centers.

"Their outpatient strategy is clearly paying off," Sheryl Skolnick, an analyst at CRT Capital Group LLC in Stamford, Connecticut, said in a telephone interview. "It's a good quarter, not a great quarter."

Tenet rose Tuesday morning, after declining as much as 3.6 percent. The shares had gained 63 percent in the 12 months through Monday.

"This marks another quarter where our volumes were among the strongest in the industry, with only a minimal contribution from the flu," chief executive officer Trevor Fetter said in an emailed statement.

Forecast Reiterated

Tenet reaffirmed its 2013 forecast for adjusted Ebitda of $1.325 billion to $1.425 billion. Fourth-quarter revenue climbed 7.3 percent to $2.33 billion.

"It's nice to see the company reiterate guidance," said Brian Tanquilut, an analyst at Jefferies & Co. in Nashville, Tennessee, in a telephone interview.

Uninsured and charity admissions rose 1.1 percent, causing higher bad debt expenses, the company said. The increase came as the influenza season reached elevated levels in December, a month earlier than usual. HCA Holdings Inc. and Community Health Systems Inc., the largest publicly traded U.S. hospital companies, also reported higher admissions for the quarter because of the flu.

The adjusted per-share result was hurt by "impairments" and "litigation and investigation costs," as well as depreciation expenses, Rick Black, a spokesman at Tenet, said in an emailed statement. He said the depreciation costs are "good news" because the company is ahead of schedule with installing information technology systems at the company's hospitals.

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