Earnings Projections Are Boosted

By Rhonda L. Rundle

Tenet Healthcare corp., continuing it’s robust run, said fiscal first-quarter net income more than doubled and raised it’s earnings guidance for the full year.

For the quarter ended Aug. 31, the hospital operator’s net jumped to $338 million, or 66 cents a share, from $155 million, or 31 cents a share, a year earlier.

After adjusting for a 3-for-2 stock split effective in June, and an accounting change, per-share earnings were up 39% from a year earlier.

Revenue rose 13% to $3.7 billion from $3.3 billion.

The Santa Barbara, Calif., company said it expects full-year per-share earnings from operations to grow at least 25% above $2.34, which it said is the appropriate comparison after eliminating good-will amortization as if the new accounting rule had been in effected last year. Tenet had previously said it expected a growth rate this year “exceeding the high-teens.”

In 4 p.m. New York Stock Exchange composite trading, Tenet shares were up $1.45 at $51.55. Tenet released some information about its first-quarter results last week, but the full-year projection was new.

Tenet said its performance continues to be driven by admissions growth, strong reimbursement trends, margin expansion, and a shift in its business mix to special acute-care services, such as cardiology, orthopedics and neurology. Such services also generate higher revenue, and account for a s much as one-half of unit revenue growth, CEO, Mr. Barbakow said.

Tenet said it has focused its capital investment and physician recruiting in those services that “aging baby boomers will need in ever greater numbers.” On a same-facility basis in the first quarter, admissions rose 7.7% among those aged 41 to 50 and 5.3% among those aged 51 to 60