The 10-second takeaway
For the quarter ended March 31 (Q1), Tenet Healthcare missed slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded slightly. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped to a loss.
Gross margins grew, operating margins contracted, net margins dropped.
Tenet Healthcare recorded revenue of $2.59 billion. The 12 analysts polled by S&P Capital IQ looked for a top line of $2.63 billion on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $2.30 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.33. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.31 per share. Non-GAAP EPS of $0.33 for Q1 were 39% lower than the prior-year quarter's $0.54 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.) GAAP EPS were -$0.85 for Q1 compared to $0.54 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 85.2%, much better than the prior-year quarter. Operating margin was 6.2%, 290 basis points worse than the prior-year quarter. Net margin was -3.4%, 620 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.65 billion. On the bottom line, the average EPS estimate is $0.80.
Next year's average estimate for revenue is $10.68 billion. The average EPS estimate is $2.76.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 370 members out of 438 rating the stock outperform, and 68 members rating it underperform. Among 92 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 80 give Tenet Healthcare a green thumbs-up, and 12 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Tenet Healthcare is outperform, with an average price target of $45.14.
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