Feeling stick to your stomach? You might be a shareholder of Tenet Healthcare (THC).
Shares of Tenet Healthcare have plunged 9.9% to $43.50 today at 2:30 p.m. after the hospital operator reported weaker than forecast earnings and lowered guidance.
The Associated Press has the details:
The company’s revenue increased 8.4 percent to $2.41 billion from $2.22 billion in the prior-year period as emergency department visits and surgeries increased.
The company’s net income was $28 million, or 27 cents per share, down from $40 million, or 37 cents per share, in the same period last year. Excluding one-time acquisition, restructuring and other charges the company would have earned $46 million, or 45 cents per share.
That was just below the average estimate of analysts polled by FactSet, who were looking for 46 cents per share on sales of $2.39 billion.
Deutsche Bank says Tenet is still a buy, despite the disappointment:
Q3 results a slight miss; lowered Q4 guidance sets early expectations w/[Vanguard Health Systems]. THC’s Q3 EBITDA of $288M fell ~3% short of consensus $296M as slightly higher expense growth and continued inpt volume softness led to a slight miss. While most Q3 operating metrics were within tempered investor expectations, we believe THC’s Q4 EBITDA guidance of $400M-$450M (vs. $475M-$500M for consensus estimates w/VHS) sets the stage for a lower launching point for THC+VHS. With Q4 EBITDA guidance pointing to ~$50M below our prior est at the midpoint, we are trimming Q4 and adjusting 2014 by ~$140M to $2.16B. Despite the est revision, we still consider the risk/reward to be compelling and reiterate Buy. Our PT moves to $60 from $65 on the lower estimates
Tenets plunge has helped drag other healthcare stocks lower. Community Health (CYH) has dropped 3.6% to $42.21, HCA Holdings (HCA) has fallen 2.1% to $46.72 and Universal Health Services (UHS) is off 1% at $80.59.
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