First-quarter profit beats expectations, Tenet Healthcare shares rise more than 9%

Dallas – Tenet Healthcare Corporation (NYSE: ) reported strong first-quarter 2024 results, with adjusted diluted earnings per share (EPS) from continuing operations reaching $3.22, well ahead of analysts' average estimate of $1.45.

The company's net operating income climbed to $5.37 billion, also beating consensus estimates of $5.15 billion. THC shares rose 9.9% in premarket trading Tuesday.

In the first quarter of 2024, the company provided common shareholders with a staggering net income from continuing operations of $2.151 billion, or $21.38 per diluted share, including $1.856 billion in after-tax gains from hospital divestitures. This figure has grown significantly compared with the first quarter of 2023, when net profit was US$143 million, or US$1.32 per diluted share. Adjusted EBITDA in the first quarter of 2024 was US$1.024 billion, an increase of 23.1% from US$832 million in the same period last year.

The company's ambulatory care segment also performed strongly, with adjusted EBITDA reaching $394 million, up 15.9% from the first quarter of 2023.

Looking ahead, Tenet raised its fiscal 2024 adjusted EBITDA outlook to a range of $3.5 billion to $3.7 billion, an increase of $215 million. As Tenet Chairman and CEO Saum Sutaria, MD, emphasized, this optimistic forecast is consistent with the company's strategic decisions and operational excellence.

“We are off to an excellent start to the year with strong growth in revenue, admissions and profitability,” said Sutaria. “Our operational excellence and focus on continuous improvement have helped us achieve success through strategic portfolio decisions, disciplined Capital allocation and debt reduction to transform the company deliver on our momentum.”

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The company's balance sheet and cash flow are also trending positively, with cash flow from operating activities reaching $586 million in the first quarter of 2024, compared with $449 million in the same period last year. Free cash flow in the first quarter of 2024 was $346 million, a significant increase from $214 million in the first quarter of 2023.

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