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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