Dallas-based Tenet Healthcare reported $1 billion in net income available to common shareholders for the third quarter, compared with $342 million a year earlier, and raised its full-year financial outlook Thursday, according to its October 29 earnings release.
The increase came as hospital revenue and admissions rose, but the results also included sizable revenue from an early contract termination. The company separately reported $646 million in contract-termination revenue for the quarter, outside its $5.63 billion in net operating revenue.
Hospital Activity Rises As Surgery Counts Slip
Tenet reported $5.63 billion in net operating revenue for the quarter ended September 30, up from $5.29 billion a year earlier. Hospital-segment revenue rose to $4.26 billion from $4.01 billion, its financial figures show.
Same-hospital admissions increased 2.8%, and emergency room visits rose 4%. Hospital surgeries declined 1.1%. The outpatient surgery segment, United Surgical Partners International, reported a 1.5% decline in same-facility surgical cases even as revenue per case increased 6.1%.
Contract Transition Changes The Quarterly Picture
Tenet said its Conifer Health Solutions subsidiary is completing an early transition of certain revenue-cycle management services under agreements with CommonSpirit Health. An accelerated timeline produced a $233 million increase in contract-termination revenue and a $97 million increase in operating revenue through timing-related accounting adjustments, its disclosure states.
The $97 million operating-revenue adjustment, combined with approximately $50 million in transition-related benefits, contributed $147 million to third-quarter adjusted earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA. Tenet said the timing adjustments do not change its full-year expectations for the affected contract-termination revenue or operating revenue.
Consolidated adjusted EBITDA increased to $1.36 billion from $1.10 billion a year earlier. The $147 million quarterly benefit is a factor in that increase and should not be confused with an additional $147 million in contract-termination revenue.
Tenet Raises Cash Flow Outlook
Tenet raised its full-year adjusted EBITDA projection to $5.05 billion to $5.20 billion, increasing the midpoint by $195 million. It also raised its adjusted free-cash-flow forecast to $2.825 billion to $3.125 billion, an increase of $100 million at the midpoint, according to the company’s updated outlook.
Adjusted diluted earnings per share increased to $6.64 from $3.70. Unlike the $12.41 in reported diluted earnings per share, that adjusted measure excludes specified items under the company’s non-GAAP methodology.
Dallas Connection And Earlier Coverage
Tenet, headquartered in Dallas, has previously faced labor disputes at facilities outside Texas.
In 2021, The Dallas Express reported that nurses at Tenet-owned Saint Vincent Hospital in Massachusetts reached a tentative agreement after a nine-month strike. That dispute is historical background, not a development in the current quarter.
Tenet’s latest figures are companywide and do not establish any change in patient charges, staffing, or care quality at individual North Texas facilities.
