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Tenet Off the Respirator

http://www.fool.com/investing/general/2006/08/11/tenet-off-the-respirator.aspx

Stephen D. Simpson, CFA
August 11, 2006

Progress is a concept that's pretty much always both subjective and relative -- after all, more than one company has pointed toward doing less badly as "progress." And so it would seem to be with Tenet Healthcare (NYSE: THC  ) . The company looks to be in better shape than it was, but it was in rough shape to begin with, and there's no telling whether management is up to the challenge of achieving some rather heady goals.

In the quarter that was, total operating revenue rose 2.5% as admissions were down (2.7% for inpatient, 1.9% on an equivalent basis), but pricing was stronger. While the company did report a loss from continuing operations, adjusted EBITDA rose 37% and the margin rose to 9.5%. Even if you exclude some items, margins improved, but there's still a sizable gulf between today's level and the 11%-13% target range.

What's more, there are some definite ongoing pressures on the company. Like Lifepoint (Nasdaq: LPNT