Tenet Healthcare Shares Rise After Demand for Hospital Services Increases

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Source: Wall Street Journal
Author: Melanie Evans
Date: July 24, 2024

Shares of Tenet Healthcare climbed in morning trading, after the national hospital and surgery-center chain reported strong demand and beat analysts expectations.

The company is the second national hospital chain this week to report strong revenue and earnings as a result of healthy demand from patients and an improved labor market. HCA Healthcare Monday reported busier hospitals and raised its guidance for year-end earnings, sending its shares higher.

Tenet's revenue for the second quarter reached $5.1 billion, beating the $5 billion analysts anticipated. The company reported adjusted earnings per share of $2.31 for the quarter, up from the expected $1.90. Tenet raised its earnings outlook for the year.

The company shed some hospitals this year, a drag on overall hospital revenue, but admissions to hospitals in its portfolio for at least a year were up 5.2% in the last three months from the same period a year ago.

Adjusted admissions, a key measure of hospital business that includes outpatient services, increased 2.4% and revenue per adjusted admission rose 5.7%, thanks in part to improved pricing, the company said.

Hospitals have won price increases in recent contracting with health insurance companies, to offset sharply rising labor costs that followed disruption from the pandemic.