Economic Overview - Recent uncertainties have heightened investor fears, particularly due to a slowing GDP growth rate of 2.8%, down from 3% in the previous quarter [1] Analyst Insights - The article reflects a perspective of an equity research analyst with over 5 years of market experience, emphasizing the importance of fundamental and technical analysis in investment decisions [1]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Tenet Healthcare Corporation's unaudited condensed consolidated financial statements for the periods ended September 30, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $29.37 billion, driven by a rise in cash to $4.09 billion, while long-term debt decreased to $12.78 billion, and total equity grew to $5.43 billion Condensed Consolidated Balance Sheet Highlights (in Millions) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$29,372** | **$28,312** | | Cash and cash equivalents | $4,094 | $1,228 | | Goodwill | $10,588 | $10,307 | | **Total Liabilities** | **$21,297** | **$22,804** | | Long-term debt, net of current portion | $12,776 | $14,882 | | **Total Equity** | **$5,426** | **$3,117** | | Retained earnings (accumulated deficit) | $2,690 | $(192) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income available to common shareholders surged to $2.88 billion for the nine months ended September 30, 2024, primarily due to a $2.91 billion gain on facility sales, with diluted EPS reaching $29.27 Statement of Operations Highlights (in Millions, except per-share amounts) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net operating revenues | $15,593 | $15,169 | | Net (gains) on sales of facilities | $(2,906) | $(12) | | Operating income | $5,135 | $1,775 | | Net income available to common shareholders | $2,882 | $367 | | Diluted earnings per share | $29.27 | $3.41 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to $2.38 billion, while investing activities provided $3.80 billion, primarily from $4.97 billion in facility sales proceeds, leading to a $2.87 billion net cash increase Cash Flow Summary (in Millions) | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,378 | $1,550 | | Net cash provided by (used in) investing activities | $3,801 | $(636) | | Net cash used in financing activities | $(3,313) | $(718) | | **Net increase in cash and cash equivalents** | **$2,866** | **$196** | | Cash and cash equivalents at end of period | $4,094 | $1,054 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies, including segment reporting changes, substantial gains from hospital dispositions, ongoing Ambulatory Care acquisitions, and significant share repurchases - The company combined its Hospital Operations and Conifer segments into a single reporting segment, '**Hospital Operations and Services**' (Hospital Operations), effective Q4 2023, with all prior-period data restated to reflect this change[14](index=14&type=chunk)[17](index=17&type=chunk) - Significant asset sales were completed in 2024, including three hospitals in South Carolina (gain of **$1.677 billion**), four in California (gain of **$527 million**), two more in California (gain of **$271 million**), and five in Alabama (gain of **$357 million**)[42](index=42&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - In March 2024, the company redeemed all **$2.1 billion** of its 4.875% senior secured notes due 2026, resulting in an **$8 million** loss from early extinguishment of debt[56](index=56&type=chunk) - A new **$1.5 billion** share repurchase program was authorized in July 2024, with **$124 million** used to repurchase **795,000 shares** under this new program as of September 30, 2024[81](index=81&type=chunk)[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses performance, focusing on strategies like Ambulatory Care expansion, hospital portfolio optimization, and debt reduction, while detailing segment results, operating expenses, liquidity, and capital resources - Key strategies include expanding the Ambulatory Care segment, driving growth in hospital systems through operational effectiveness and portfolio optimization, and reducing long-term debt[139](index=139&type=chunk)[141](index=141&type=chunk)[146](index=146&type=chunk) - The company continues to face staffing shortages, particularly for nurses, and inflationary pressures on wages and medical supplies[133](index=133&type=chunk)[135](index=135&type=chunk) Adjusted EBITDA Reconciliation (in Millions) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net income available to common shareholders | $2,882 | $367 | | Adjustments (Interest, Taxes, D&A, etc.) | $65 | $2,162 | | **Adjusted EBITDA** | **$2,947** | **$2,529** | - Liquidity was significantly boosted by proceeds from asset sales, with cash at **$4.094 billion** and availability under the credit facility at **$1.5 billion** as of September 30, 2024[269](index=269&type=chunk) [Results of Operations by Segment](index=56&type=section&id=Results%20of%20Operations%20by%20Segment) Hospital Operations revenue decreased 0.5% (up 8.5% ex-divestitures), while Ambulatory Care revenue grew 17.5% due to acquisitions and higher net revenue per case, with a superior operating margin of 37.9% Segment Performance - Nine Months Ended Sep 30, 2024 (in Millions) | Segment | Net Operating Revenues | Operating Income | Operating Margin | | :--- | :--- | :--- | :--- | | Hospital Operations | $12,318 | $3,893 | 31.6% | | Ambulatory Care | $3,275 | $1,242 | 37.9% | - On a same-hospital basis, the Hospital Operations segment experienced a **4.9% increase** in total admissions and a **7.8% increase** in net operating revenues for the nine months ended September 30, 2024, compared to the prior year[212](index=212&type=chunk)[216](index=216&type=chunk) - The Ambulatory Care segment's revenue growth for the nine months ended September 30, 2024, was driven by a **$403 million** increase from acquisitions and a **$147 million** increase in same-facility net operating revenues[236](index=236&type=chunk) - The Ambulatory Care segment added a net of **48 facilities** in the first nine months of 2024, primarily through **51 acquisitions** and the opening of **12 de novo centers**[246](index=246&type=chunk) [Liquidity and Capital Resources](index=68&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity significantly strengthened to $4.09 billion cash, driven by $4.97 billion in asset sales proceeds, used for debt reduction and share repurchases, with projected capital expenditures of $800-$900 million - The ratio of total long-term debt (net of cash) to the last twelve months' Adjusted EBITDA was **2.22x** at September 30, 2024[263](index=263&type=chunk) - Capital expenditures for the full year 2024 are anticipated to be between **$800 million** and **$900 million**[267](index=267&type=chunk) Key Cash Flow Drivers - Nine Months Ended Sep 30, 2024 (in Billions) | Item | Amount | | :--- | :--- | | Net cash from operating activities | $2.38 | | Proceeds from sales of facilities | $4.97 | | Repayments of borrowings | $(2.21) | | Repurchases of common stock | $(0.67) | | Purchases of businesses | $(0.52) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk primarily stems from interest rates on its debt, with nearly all $12.97 billion in long-term debt carrying fixed rates, minimizing floating rate exposure - The company has minimal exposure to floating interest rates as all current long-term debt has fixed rates, except for potential borrowings under its Credit Agreement[284](index=284&type=chunk) Fixed-Rate Long-Term Debt (in Billions) | Metric | Amount | | :--- | :--- | | Total Principal | $12.969 | | Fair Value | $12.862 | | Average Effective Interest Rate | 5.7% | [Item 4. Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2024[289](index=289&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[290](index=290&type=chunk) [PART II. OTHER INFORMATION](index=74&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits and regulatory investigations, with material legal proceedings detailed in Note 12 of the Condensed Consolidated Financial Statements - For information regarding material legal proceedings, the company incorporates by reference Note 12 to the Condensed Consolidated Financial Statements[291](index=291&type=chunk) [Item 1A. Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material changes to the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2023[292](index=292&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2024, the company repurchased 795,000 shares for $124 million under its new $1.5 billion share repurchase program, with $1.376 billion remaining available Share Repurchases - Q3 2024 | Month | Shares Purchased (Thousands) | Average Price Paid | | :--- | :--- | :--- | | July 2024 | — | N/A | | August 2024 | — | N/A | | September 2024 | 795 | $155.95 | - In July 2024, the board authorized a new share repurchase program for up to **$1.5 billion** of common stock with no expiration date[293](index=293&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) No directors or Section 16 officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter of 2024 - No directors or Section 16 officers adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended September 30, 2024[295](index=295&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with the report include certifications from the CEO and CFO, as well as Inline XBRL taxonomy documents[297](index=297&type=chunk)

| --- | --- | --- | --- | |------------------|-------|-------|-------| | 3rd Quarter 2024 | | | | | | | | | | | | | | | Earnings Release | | | | | Presentation | | | | | October 29, 2024 | | | | Cautionary Statements This presentation includes "forward looking statements." These statements relate to future events, including, but not limited to, statements regarding our liquidity, operating results, future earnings, financial position, operational and strategic initiatives, and developments in legislation, r ...

Core Insights - Tenet Healthcare reported revenue of $5.12 billion for the quarter ended September 2024, reflecting a year-over-year increase of 1.1% and surpassing the Zacks Consensus Estimate of $5.05 billion by 1.48% [1] - The company's EPS for the quarter was $2.93, significantly higher than the $1.44 reported in the same quarter last year, and exceeded the consensus estimate of $2.33 by 25.75% [1] Financial Performance Metrics - Net Operating Revenues were $5.12 billion, compared to the three-analyst average estimate of $5.05 billion, marking a year-over-year change of +1.1% [3] - Net Operating Revenues from Ambulatory Care reached $1.14 billion, exceeding the average estimate of $1.07 billion, with a year-over-year increase of +21% [3] - Net Operating Revenues from Hospital Operations and other segments totaled $3.98 billion, slightly above the average estimate of $3.96 billion, reflecting a year-over-year change of +1.6% [3] - Adjusted EBITDA for Hospital Operations and other was reported at $539 million, surpassing the average estimate of $473.79 million [3] - Equity in earnings of unconsolidated affiliates was $62 million, compared to the average estimate of $64.09 million [3] - Adjusted EBITDA for Ambulatory Care was $439 million, slightly above the average estimate of $432.72 million [3] Stock Performance - Tenet's shares have declined by 16.1% over the past month, while the Zacks S&P 500 composite has increased by 1.7% [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [4]

Tenet Healthcare (THC) came out with quarterly earnings of $2.93 per share, beating the Zacks Consensus Estimate of $2.33 per share. This compares to earnings of $1.44 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 25.75%. A quarter ago, it was expected that this hospital operator would post earnings of $1.89 per share when it actually produced earnings of $2.31, delivering a surprise of 22.22%.Over the last four quarters, th ...

Wall Street analysts forecast that Tenet Healthcare (THC) will report quarterly earnings of $2.33 per share in its upcoming release, pointing to a year-over-year increase of 61.8%. It is anticipated that revenues will amount to $5.05 billion, exhibiting a decline of 0.4% compared to the year-ago quarter. Over the last 30 days, there has been an upward revision of 0.2% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration ...

Hospital company Tenet Healthcare Corporation (THC) is set to report its third-quarter 2024 results on Oct. 29, 2024, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $2.33 per share and $5.05 billion, respectively.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The earnings estimate for the to-be-reported quarter has remained stable over the past 60 days. The bottom-line projection indicates year-over-year gro ...

Hospital company Tenet Healthcare Corporation (THC) is trading comparatively cheap at the moment from a valuation standpoint. Its forward earnings multiple of 14.75 is lower than the industry average of 16.18. The stock also looks attractively valued relative to other medical facility operators like HCA Healthcare, Inc. (HCA) and Encompass Health Corporation (EHC) , with forward 12-month P/E of 16.62X and 21.33X. Tenet Healthcare has a Value Score of A. Zacks Investment Research Image Source: Zacks Investme ...

Tenet Healthcare (THC) closed the most recent trading day at $152.78, moving -0.84% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.21%. Elsewhere, the Dow saw a downswing of 0.14%, while the tech-heavy Nasdaq depreciated by 0.05%. Prior to today's trading, shares of the hospital operator had lost 2.28% over the past month. This has was narrower than the Medical sector's loss of 3.28% and lagged the S&P 500's gain of 5.94% in that time. The investment comm ...

Group 1 - Tenet Healthcare's stock closed at $156.57, reflecting a slight decrease of -0.11% from the previous session, underperforming compared to the S&P 500's gain of 0.9% [1] - Over the past month, Tenet Healthcare's stock has declined by 3.24%, contributing to a loss of 4.05% in the Medical sector, while the S&P 500 gained 3.15% [1] Group 2 - The upcoming earnings report for Tenet Healthcare is scheduled for October 29, 2024, with an expected EPS of $2.33, representing a significant increase of 61.81% year-over-year [2] - Revenue is anticipated to be $5.05 billion, indicating a slight decrease of 0.41% compared to the same quarter last year [2] Group 3 - For the full year, Zacks Consensus Estimates project earnings of $10.72 per share and revenue of $20.84 billion, reflecting increases of 53.58% and 1.4% respectively compared to the previous year [3] Group 4 - Recent adjustments to analyst estimates for Tenet Healthcare suggest positive sentiment regarding the company's business operations and profit generation capabilities [4] - The Zacks Rank system, which evaluates these estimate changes, currently ranks Tenet Healthcare as 1 (Strong Buy), indicating strong potential for stock performance [6] Group 5 - Tenet Healthcare's Forward P/E ratio is 14.62, which is lower than the industry average of 15.39, suggesting that the stock may be undervalued [7] - The company's PEG ratio stands at 0.8, compared to the industry average of 1.13, indicating favorable growth expectations relative to its valuation [8] Group 6 - The Medical - Hospital industry, which includes Tenet Healthcare, holds a Zacks Industry Rank of 2, placing it in the top 1% of over 250 industries, suggesting strong overall performance potential [8][9]