Tenet says quarter will be profitable, despite hospital slump

Despite problems in the hospital industry, Tenet Healthcare is predicting that it will show a fourth-quarter '08 profit, surprising analysts who follow the investor-owned giant. Still, hospital chains are generally in tenuous shape, including Tenet, whose stock has lost more than three-quarters of its value since last August.

Tenet may have had a decent fourth quarter, but it's still at risk. The company's leaders have refused to confirm or revise their 2009 outlook, saying they're just not sure how demand or payer mix will shape.

Meanwhile, its peers are facing major challenges this year as well. Health Management Associates stock is down 71 percent, Community Health Systems 49 percent and Universal Health Services fell 41 percent.

Among other things, these companies are struggling with lower admissions trends. HMA, for example, expects fourth-quarter admissions to be flat or down 1 percent. To cope with these pressures, HMA expects to cut capital spending to 4.5 percent, down from 6 percent of revenue in 2008.

To learn more about hospital chains' performance:
- read this Wall Street Journal article

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