Bloomberg News

Tenet Declines as 2014 Earnings Forecast Lower Than Estimates

February 25, 2014

Tenet Healthcare Corp. (THC:US), the third-largest U.S. for-profit hospital company, declined the most in three months after providing a 2014 forecast that was lower than analysts’ estimates.

Tenet fell (THC:US) 10 percent to $43.30 at 1:46 p.m. New York time, after earlier declining as much as 11 percent, the biggest intraday drop for the Dallas-based company since Nov. 5.

Earnings before interest, taxes, depreciation and amortization may be $1.8 billion to $1.9 billion this year, the company said yesterday in a statement. Analysts anticipated $1.96 billion, the average of 18 estimates compiled (THC:US) by Bloomberg. The forecast includes expected government reimbursement cuts, Chief Financial Officer Daniel Cancelmi said today on a conference call.

Tenet’s 2014 outlook was cause for “significant concerns,” Sheryl Skolnick, a Stamford, Connecticut-based analyst at CRT Capital Group LLC wrote today in a note to clients. Skolnick, who had estimated 2014 Ebitda of $2.1 billion, lowered her rating to hold from buy.

“The stock is too rich, the promise of reform too thin, and execution too variable for us to continue to rate THC shares a ‘buy,’” she said.

To contact the reporter on this story: Caroline Chen in New York at cchen509@bloomberg.net

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


LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • THC
    (Tenet Healthcare Corp)
    • $48.23 USD
    • -0.92
    • -1.91%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus