The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Tenet Healthcare beat expectations on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share shrank significantly. GAAP earnings per share increased.
Margins increased across the board.
Tenet Healthcare notched revenue of $2.53 billion. The 15 analysts polled by S&P Capital IQ expected revenue of $2.48 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.60. The 18 earnings estimates compiled by S&P Capital IQ anticipated $0.68 per share. Non-GAAP EPS of $0.60 for Q4 were 29% lower than the prior-year quarter's $0.84 per share. (The prior-year quarter included -$0.09 per share in earnings from discontinued operations.) GAAP EPS were $0.45 for Q4 versus -$0.71 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 83.4%, much better than the prior-year quarter. Operating margin was 9.4%, 110 basis points better than the prior-year quarter. Net margin was 2.1%, 510 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $2.67 billion. On the bottom line, the average EPS estimate is $0.58.
Next year's average estimate for revenue is $10.50 billion. The average EPS estimate is $2.91.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 363 members out of 433 rating the stock outperform, and 70 members rating it underperform. Among 96 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 84 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 $29.50.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.