What happened

Investors in Tenet Healthcare (NYSE:THC), a for-profit hospital operator, are having a great day. Shares are up 15% as of 11:10 a.m. EDT after the company reported first-quarter results that featured a surprise profit.

So what

Here's a look at the numbers that have traders cheering today:

  • Revenue dropped 2.4% to $4.7 billion. That was still ahead of the $4.6 billion that Wall Street had expected.
  • Net income was $99 million, or $0.95 per share. 
  • Adjusted EPS was $0.57 for the period. That was much better than the $0.03 loss that traders were projecting.

As for guidance, here is what the company expects to happen in the upcoming quarter:

  • Revenue will land between $4.475 billion and $4.675 billion.
  • Adjusted EPS is projected to land between $0.15 to $0.29.

The midpoint of both of these ranges is ahead of what Wall Street was expecting. 

Finally, the strong start to the year allowed management to tweak its guidance for fiscal year 2018:

  • Revenue is still estimated to land between $17.9 billion and $18.3 billion. 
  • Adjusted EPS is projected to come in between $1.36 to $1.70. That's much higher than the old range of $0.73 to $1.07 per share, and is also well above the $0.92 that the pros were modeling.

Given the updates, it's hard to blame traders for feeling giddy today.

Doctor giving double thumbs up

Image source: Getty Images.

Now what

This is the second quarter in a row that Tenet has reported better-than-expected results and raised its guidance, so it is good to see the business is performing well. However, the renewed prosperity has sparked a rally in recent months that has propelled the stock to a fresh 52-week high. Given the company's meager revenue growth, I have a hard time getting excited about owning this stock, even though profits are heading in the right direction. That's why my plan is to root for Tenet Healthcare's continued success from the sidelines.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.