Healthcare Service Provider Tenet Healthcare's Q3 Earnings Beat On Higher Volumes; Tightens Guidance

Tenet Healthcare Corp THC reported Q3 net operating income of $101 million ($0.94 per diluted share), down from the $131 million ($1.16 per diluted share) in the prior year. 

Q3 adj EPS was $1.44, beating the consensus of $1.20 and up from $1.42 a year ago.

Net operating revenues for the quarter came in at $5.07 billion, up from $4.80 billion, beating the consensus of $5.02 billion.

United Surgical Partners International, the ambulatory business, Tenet reported $941 million in Q3 net operating revenues, up year over year from $806 million, driven by strong same-facility net surgical case growth, acquisitions, and opening of de novo facilities, service line growth, and improved pricing yield.

Same-facility surgical cases rose 4.1% year over year.

Among its acute care hospitals, Tenet’s net operating revenues rose 3.7% year over year, from $3.78 billion to $3.92 billion, due to a combination of higher adjusted admissions and improved pricing yield.

Same-hospital and adjusted admissions rose 0.6% and 0.4% year over year, respectively, though outpatient visits fell 2%, ER visits dipped 0.9%, and hospital surgeries fell 0.7%. 

Guidance: Tenet sees Q4 net operating revenue projections at $5.13 billion-$5.33 billion versus consensus of $5.24 billion. 

The company sees Q4 adjusted EPS of $1.12-$1.74 compared to consensus of $1.75.

For FY23, Tenet projects revenues of $20.3 billion -$20.5 billion compared to prior guidance of $20.1 billion-$20.5 billion and consensus of $20.4 billion.

The company forecasts FY23 adjusted EPS of $5.43-$6.05 versus prior guidance of $5.18-$6.03 and consensus of $5.81.

Price Action: THC shares are down 0.32% at $55.08 on the last check Tuesday.