Tenet Healthcare has reported a slight improvement in revenue of up to $2.2 billion for Q3 compared to $2.1 billion for the same period last year, falling short of analysts forecasts. The hospital owner is struggling to reach profitability, in part because of increases in bad debt and patients' inability to pay their bills, the company reports. Bad debt rose for the quarter to 5.8 percent to $163 million, up from $142 million last year.
The Texas-based company says that it expects to break even with earnings of $75 million for 2008; EBITDA is now forecast between $700 million and $750 million, down from previous estimates of between $750 million and $825 million.
In spite of some modest increases in revenue, Tenet will continue to struggle, analysts say. In a research note, Goldman Sachs warns that, "Tenet's markets have the highest absolute unemployment level of any of the public hospital companies (7.3 percent in key markets as of August, according to the Bureau of Labor Statistics) and higher foreclosures than average, which may explain Tenet's worsening outlook compared to peers."