Tenet Healthcare Corp. beat analysts’ revenue expectations last year, according to the company’s fourth quarter and year-end 2018 results reported Monday.
The Dallas-based hospital chain drew net revenue of $4.6 billion in the fourth quarter of 2018, down 7.2% from the prior-year period, when it was nearly $5 billion, but still managed to beat estimates from Zacks Investment Research which pegged revenue would fall 9.8% to $4.49 billion in the quarter.
Tenet’s full-year 2018 revenue also beat analysts’ expectations, coming in at $18.3 billion, down 4.5% from $19.2 billion in 2017. Zacks predicted Tenet’s full-year revenue would be $18.18 billion.
Tenet’s operating income fell to $404 million in the fourth quarter of 2018, down from $485 million in the prior-year period. In the full year, however, operating income was $1.6 billion, compared with $1.1 billion in 2017.
Tenet reported a $5 million net loss attributable to its shareholders in the fourth quarter of 2018, significantly narrowed from the prior-year period, when the company’s net loss to shareholders was $229 million. In the full year, net income to available to shareholders was $111 million, compared with a $704 million net loss in 2017.
Tenet CEO Ron Rittenmeyer said in a statement that the company saw strong results in the fourth quarter and beat consensus expectations for revenue, adjusted earnings before interest, taxes, depreciation and amortization and adjusted earnings per share. He said 2018 was a significant year for the company.
“We meaningfully improved our financial results, and made significant progress to create a more efficient, agile enterprise with new leadership helping to reshape strategy and drive consistency in execution,” he said. “We expect to make additional progress in each of our business segments in 2019 in line with our plan to deliver long-term sustainable growth.”
Rittenmeyer announced at the J.P. Morgan Healthcare Conference last month that Tenet had transitioned 20% of its corporate leaders and 35% of its hospital leaders last year. He told Modern Healthcare most of the departures were involuntary and based on performance.
Tenet’s adjusted EBITDA came out to nearly $2.6 billion in 2018, up 4.7% from 2017, when it was $2.4 billion.
With four fewer hospitals in 2018, Tenet’s total admissions were down 9.2% year-over-year to about 690,000. Patient days were down nearly 10% year-over-year, to roughly 3.2 million. Inpatient surgeries were also down nearly 10% to 185,000. On a same-store basis, total admissions fell 1.7%, patient days fell 2.2% and inpatient surgeries fell 2.8%.
Total outpatient visits fell 9.5% year-over-year to 7 million, and emergency room visits fell 8% to 2.6 million. On a same-store basis, outpatient visits fell 0.9% and emergency room visits increased 1.1%.
Net operating revenue in Tenet’s hospital segment declined 8.4% year-over-year primarily because of divestitures. On a same-hospital basis, net patient revenue declined by 1.3% year-over-year. Net operating revenue grew 1.7% year-over-year in Tenet’s ambulatory care segment, and revenue in Tenet’s Conifer segment declined 5.6% in that time.