(Reuters) – Tenet Healthcare Corp on Thursday forecast its annual profit above estimates after posting strong quarterly results, driven by higher admissions on the back of continued demand for non-urgent procedures in older adults.
Tenet’s strong earnings come at a time when major insurers such as UnitedHealth Group and Humana have warned of higher medical costs due to a jump in non-urgent surgeries in the United States, highlighting demand for such procedures, especially by older adults.
Excluding items, the hospital operator said it expects to earn between $5.76 and $6.90 per share in 2024, the midpoint of which is above analysts’ estimates of $5.84.
Tenet is betting on growth in its ambulatory care unit, which provides outpatient services to patients who do not require admission to a hospital. It sees a 1% to 3% rise in surgical cases volumes for the year from the segment.
Hospital operators were expecting to see a profit boost as more people opt for surgical procedures such as hip and knee replacements that were otherwise delayed due to the pandemic.
Larger rival HCA Healthcare, which is the biggest for-profit hospital operator in the United States, also forecast 2024 profit above estimates, owing to strong demand for medical procedures and higher reimbursement from insurers.
On an adjusted basis, Tenet reported net income of $2.68 per share for the quarter ended Dec. 31. Analysts on average had expected a profit of $1.60 per share, according to Refinitiv IBES data.
The company’s operating revenue of $5.38 billion came in above estimates of $5.29 billion, according to Refinitiv IBES data.
Tenet expects net operating revenue in the range of $19.9 billion to $20.3 billion, below estimates of $21.30 billion.
(Reporting by Vaibhav Sadhamta in Bengaluru; Editing by Maju Samuel)
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