Tenet lands $448M in profit in Q3 buoyed by higher volumes

Tenet Healthcare's sign outside its headquarters
In September, Tenet welcomed a new CEO. The company also sold its five Miami hospitals for $1.1 billion, which it used to pay off debt, its earnings report said. (Tenet Healthcare)

Tenet Health announced $448 million in profits for the third quarter on Wednesday, in part driven by increased ER admissions and surgical procedures.  

That compares to a net loss of $197 million during the same quarter last year.

In all, the company posted revenues of more than $4 billion this quarter, up from $3.8 billion the same time last year, attributed to higher volumes, higher care intensity and a favorable payer mix. The ambulatory segment also saw higher returns due to higher care intensity, new service expansion and the acquisition of surgical facilities

During this quarter, in September, Tenet welcomed a new CEO. The company also sold its five Miami hospitals for $1.1 billion, which it used to pay off debt, its earnings report said. 

“We are very pleased with our performance during the quarter and the drive to deliver consistent and sustainable growth across each of our operating segments,” said Tenet’s Executive Chairman Ron Rittenmeyer in a press release. “With the ongoing implementation of our transformation, we are positioning Tenet for continued high margin growth and strong cash flow generation.”

RELATED: Tenet COO and President Sutaria to take over for Rittenmeyer as CEO in September

In light of the latest figures, Tenet raised its full year outlook from $7.09 to $7.50 a share. It also revised its fourth quarter revenue outlook from $4.8 billion to $5.1 billion. 

In an earnings call Thursday morning, the company noted that COVID-19 cases and admissions accelerated this quarter, now making up 10% of admissions (versus 4% last quarter). Despite these, hospital performance exceeded expectations, the company said, in part thanks to Tenet’s monitoring of PPE and staffing levels. For instance, 580 physicians joined the surgical facilities collective just this quarter. The company emphasized that hospital operators are focused on their own real-time labor management to help mitigate costs and demand.

Some areas faced the highest pressure with lower reserves in staff, the company told investors during the call: ICUs and operating and emergency rooms. It emphasized that even though the COVID-19 spike this quarter was lower than it was at the beginning of this year, the labor market was nowhere near as disrupted as it is right now, in particular with registered nurses. 

“Even with COVID spikes in many of our markets, our approach has been very effective in navigating these impacts efficiently across our portfolio,” said CEO Saum Sutaria, M.D., in the announcement. “As part of our efforts to remain ahead of service demands, we are enhancing capacity and increasing access to critical services and technology in our hospital markets while expanding our ambulatory business through organic growth and compelling additions to our platform.”