Hospital chains Tenet Healthcare Corp. and Health Management Associates have both posted better returns than they'd expected, primarily by holding down costs and offsetting growing bad debts and lower patient volumes.
HMA reported second-quarter earnings of 13 cents per share from ongoing operations, 3 cents above Street estimates thanks to emergency department operations improvements and physician recruitment successes. HMA raised its 2009 outlook from 45 to 49 cents per share, up from a previous range of 37 to 45 cents per share.
Tenet, which expects to post a small net loss for the second quarter, nonetheless managed to push up revenue 4.5 percent and improve free cash flow, despite coping with rising bad debts and a drop in commercially-insured patients. Tenet is projecting a 50.9 percent rise in adjusted earnings before interest, taxes, depreciation and amortization, to $246 million, for all its hospitals in the second quarter.
Along with HMA, Tenet raised its full-year earnings forecast, with execs telling analysts that they believe they can keep improving operations thanks to strict cost controls and higher outpatient volumes. Tenet has raised its 2009 outlook for adjusted earnings before interest, taxes, depreciation and amortization to a range between $810 million and $875 million, up from the $760 million to $825 million range. It expects a 2009 final result between a loss of $20 million and net income of $60 million.
To learn more about these results:
- read this Reuters piece