Dallas-based care delivery network Tenet Healthcare is raising its full-year guidance, the provider announced ahead of its earnings call.
It’s now expected Tenet will record $3.825 to $3.975 billion adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2024, a $300 million increase. Cash flow is projected to increase $150 million from $1.1 billion to $1.350 billion.
Net income for the quarter came in at $259 million or $2.64 per diluted share, while adjusted diluted earnings per share was $2.31. Analysts anticipated just $1.89 earnings per share, which would have already been significant year-over-year growth.
"Our results through the second quarter, which have significantly exceeded our expectations, have been driven by volume and revenue growth as well as sustained fundamentally strong operating performance," said Saum Sutaria, M.D., chairman and CEO of Tenet in a news release. "Our portfolio transformation and enhanced cash flow profile provide us with compelling opportunities for growth as we execute on our strategy and continue to broaden our service offerings for patient-centered care.”
Tenet has now outperformed expectations for five straight quarters. Its stock is up more than 5% following the earnings announcement.
Sutaria noted the company added 11 new orthopedic centers, including three surgery centers through a partnership with Florida Orthopedic Institute that perform more than 15,000 cases per year. The integration of other centers acquired last quarter are "on track."
Adjusted EBITDA for Tenet was $945 million for the quarter due to robust same-hospital admission growth, a favorable payer mix and better contract labor costs.
In its ambulatory care business, adjusted EBITDA clocked in at $447 million, a 20.8% increase year-over-year. Revenues increased following strong net revenue per case growth, facility acquisitions and increased service lines, according to a news release.
Net operating revenues in its hospital segment decreased 4.3% year-over-year after selling hospitals in the first quarter, but same-hospital net patient service revenue per adjusted admission increased 5.7% year-over-year. A new hospital will soon open in San Antonio, Texas, a location that is growing at six times the national average.
Tenet also recognized a $30 million pre-tax impact because of additional Medicaid supplemental revenues in Texas, similar to previously disclosed Medicaid revenues in Michigan.
Saum said the company is investing in AI technologies as well.
"Just as we were one of the industry's early movers ni capturing savings in our offshore capitve global business center, we are now investing in selected AI enabled technologies to enhance our clinical and administrative efficiency," he explained.
The company’s board of directors also authorized a $1.5 billion stock buyback program.