Bloomberg News

Tenet Sinks Most Since 2011 as Quarterly Forecast Disappoints

November 05, 2013

Tenet Healthcare Corp. (THC:US), the operator of 77 hospitals and 176 outpatient centers, sank the most in almost two years after its fourth-quarter forecast was less than analysts’ estimates because of slow patient admissions.

Tenet dropped 9.2 percent to $43.82 at 10:07 a.m. New York time, after touching $43.37 in the biggest intraday decline since December 2011. The shares of the Dallas-based company had gained 49 percent this year through yesterday.

Tenet forecast fourth-quarter earnings before interest, taxes, depreciation and amortization of as much as $450 million, excluding some items, in a statement yesterday. That was less than analysts’ average $482 million estimate, Frank Morgan, an analyst with RBC Capital Markets, wrote in a research note today.

“Management’s fourth-quarter 2013 guidance is below consensus and reflects continued soft inpatient volumes,” Morgan wrote, also pointing out a difficult reimbursement environment and the completion of Tenet’s $1.8 billion acquisition of Vanguard Health Systems Inc. The forecast, he said, “assumes minimal synergies captured in the fourth-quarter 2013.”

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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Companies Mentioned

  • THC
    (Tenet Healthcare Corp)
    • $60.26 USD
    • 0.45
    • 0.75%
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