Tenet Healthcare (NYSE: THC) reported Q2 EPS of $0.49, $0.24 better than the analyst estimate of $0.25. Revenue for the quarter came in at $4.5 billion versus the consensus estimate of $4.57 billion.

• Tenet reported net income from continuing operations available to Tenet common shareholders of $24 million or $0.23 per diluted share in the second quarter of 2018 compared to a net loss of $56 million or $0.56 per diluted share in the second quarter of 2017. After adjusting for certain items, which totaled $27 million or $0.26 per share in the second quarter of 2018, Tenet reported Adjusted diluted earnings per share from continuing operations of $0.49 in the second quarter of 2018 compared to an Adjusted diluted loss per share of $0.17 in the second quarter of 2017.
• Adjusted EBITDA was $634 million in the second quarter of 2018 compared to $570 million in the second quarter of 2017. Adjusted EBITDA in the second quarter of 2018 consisted of $345 million in the Hospital segment, $198 million in the Ambulatory segment and $91 million in the Conifer segment.
• Net cash provided by operating activities was $461 million in the first half of 2018, an increase of $60 million when compared to $401 million in the first half of 2017. Free Cash Flow was $193 million, an increase of $140 million when compared to $53 million in the first half of 2017. Adjusted Free Cash Flow was $259 million, a $142 million increase when compared to $117 million in the first half of 2017.
• Hospital segment same-hospital net patient revenue grew 3.2 percent. Admissions decreased 2.3 percent, adjusted admissions decreased 0.2 percent, and revenue per adjusted admission increased 3.5 percent.
• Ambulatory Care segment same-facility system-wide revenue grew 6.9 percent, with cases up 4.3 percent and revenue per case up 2.4 percent. Surgical revenue grew 6.6 percent, with cases up 3.4 percent and revenue per surgical case up 3.1 percent.
• Conifer segment revenues decreased 3.5 percent primarily due to divestitures by Tenet and other customers.
• 2018 Outlook includes an increase in net income from continuing operations available to Tenet common shareholders to $115 million to $186 million, Adjusted EBITDA is unchanged at $2.550 billion to $2.650 billion, an increase in diluted earnings per share from continuing operations to $1.11 to $1.79 and an increase in Adjusted diluted earnings per share from continuing operations to $1.54 to $1.88.

“We are becoming a more agile and decisive organization and are pleased with our strong financial results for the third quarter in a row,” said Ronald A. Rittenmeyer, Executive Chairman and CEO. “We have demonstrated our ability to appropriately minimize costs, which will be an ongoing fundamental part of how we do business. Our top priorities remain strengthening our portfolio, delivering more consistent organic growth and taking additional steps to enhance our margins and free cash flow.”

GUIDANCE:

Tenet Healthcare sees FY2018 EPS of $1.54-$1.88, versus the consensus of $1.56. Tenet Healthcare sees FY2018 revenue of $17.9-18.3 billion, versus the consensus of $18.15 billion.

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