[Financial Highlights and Corporate Developments](index=1&type=section&id=Financial%20Highlights%20and%20Corporate%20Developments) [Second Quarter 2024 Performance Summary](index=1&type=section&id=Second%20Quarter%202024%20Performance%20Summary) The company reported strong Q2 2024 results, exceeding expectations with significant growth in Adjusted EBITDA and net income Q2 & Six Months 2024 vs 2023 Performance | ($ in millions, except per share) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net operating revenues | $5,103 | $5,082 | $10,471 | $10,103 | | Net income available to Tenet common shareholders | $259 | $123 | $2,410 | $266 | | Net income per diluted share | $2.64 | $1.15 | $24.22 | $2.47 | | Adjusted EBITDA | $945 | $843 | $1,969 | $1,675 | | Adjusted diluted earnings per share | $2.31 | $1.44 | $5.53 | $2.87 | - Consolidated Adjusted EBITDA for Q2 2024 was **$945 million**, a **12.1% increase** over Q2 2023, driven by strong same-hospital admission growth, ambulatory net revenue per case growth, favorable payer mix, and improved contract labor costs[35](index=35&type=chunk)[63](index=63&type=chunk) - The company recognized a **$30 million favorable pre-tax impact** in Q2 2024 from additional Medicaid supplemental revenues in Texas related to prior years[13](index=13&type=chunk)[45](index=45&type=chunk) [Balance Sheet, Cash Flow, and Capital Allocation](index=3&type=section&id=Balance%20Sheet%2C%20Cash%20Flow%2C%20and%20Capital%20Allocation) The company improved its financial health with increased free cash flow, reduced leverage, and a new share repurchase program - The Board of Directors authorized a new **$1.5 billion share repurchase program**[28](index=28&type=chunk)[37](index=37&type=chunk) - The company completed its previous **$1 billion share repurchase program** by repurchasing 4,801,461 shares for $548 million in the first six months of 2024[66](index=66&type=chunk) - **Free cash flow** for the first six months of 2024 was **$948 million**, compared to $680 million for the same period in 2023[30](index=30&type=chunk)[101](index=101&type=chunk) - The ratio of **net debt to Adjusted EBITDA improved to 2.61x** at June 30, 2024, down from 2.79x at March 31, 2024, and 3.89x at December 31, 2023[67](index=67&type=chunk) [Segment Performance](index=4&type=section&id=Segment%20Performance) [Ambulatory Care Segment](index=4&type=section&id=Ambulatory%20Care%20Segment) The Ambulatory Care segment delivered strong Q2 2024 growth in revenue and Adjusted EBITDA, driven by higher acuity and acquisitions Ambulatory Segment Q2 & Six Months 2024 Performance ($ in millions) | Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net operating revenues | $1,141 | $942 | $2,136 | $1,847 | | Same-facility surgical cases | 0.2% | 6.6% | 0.0% | 7.2% | | Adjusted EBITDA | $447 | $370 | $841 | $710 | | Adjusted EBITDA margin | 39.2% | 39.3% | 39.4% | 38.4% | - Q2 2024 net operating revenues **increased 21.1% YoY**, driven by strong net revenue per case growth, facility acquisitions, and new service lines[70](index=70&type=chunk) - Surgical business same-facility system-wide net revenue per case **increased 6.8%** in Q2 2024, driven by higher acuity case mix and favorable payer mix[41](index=41&type=chunk) - As of June 30, 2024, USPI had interests in **520 ambulatory surgery centers** (377 consolidated) and **24 surgical hospitals** (7 consolidated) in 38 states[69](index=69&type=chunk) [Hospital Operations and Services Segment](index=5&type=section&id=Hospital%20Operations%20and%20Services%20Segment) The Hospital segment's revenue declined due to divestitures, but same-hospital performance and Adjusted EBITDA remained strong Hospital Segment Q2 & Six Months 2024 Performance ($ in millions) | Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net operating revenues | $3,962 | $4,140 | $8,335 | $8,256 | | Same-hospital admissions | 5.2% | 3.0% | 4.7% | 3.6% | | Adjusted EBITDA | $498 | $473 | $1,128 | $965 | | Adjusted EBITDA margin | 12.6% | 11.4% | 13.5% | 11.7% | - The **4.3% decline** in Q2 2024 net operating revenues was primarily due to the impact of hospital divestitures in Q1 2024[73](index=73&type=chunk) - Same-hospital net patient service revenue per adjusted admission **increased 5.7% year-over-year** for Q2 2024, driven by improved pricing yield, favorable payer mix, and a focus on higher acuity services[44](index=44&type=chunk) [2024 Financial Outlook](index=6&type=section&id=2024%20Financial%20Outlook) [Consolidated Outlook](index=6&type=section&id=Consolidated%20Outlook) The company raised its full-year 2024 outlook for Adjusted EBITDA and Free Cash Flow, reflecting strong year-to-date performance FY 2024 and Q3 2024 Consolidated Outlook ($ in millions, except per share) | Metric | FY 2024 Outlook | Q3 2024 Outlook | | :--- | :--- | :--- | | Net operating revenues | $20,600 to $21,000 | $5,000 to $5,100 | | Adjusted EBITDA | $3,825 to $3,975 | $900 to $950 | | Adjusted diluted EPS | $10.41 to $11.12 | $2.16 to $2.58 | | Free cash flow | $1,100 to $1,350 | N/A | - The FY 2024 Adjusted EBITDA Outlook was **increased by $300 million**, and the Free Cash Flow outlook was **increased by $150 million**[63](index=63&type=chunk) [Segment Outlook](index=7&type=section&id=Segment%20Outlook) The company provided a detailed full-year 2024 outlook for its Ambulatory and Hospital segments, projecting continued growth FY 2024 Ambulatory Segment Outlook | Metric | FY 2024 Outlook | | :--- | :--- | | Net operating revenues | $4,325M to $4,475M | | Adjusted EBITDA | $1,750M to $1,810M | | Surgical cases volumes | Up 1.0% to 2.0% | | Net revenues per surgical case | Up 4.5% to 5.5% | FY 2024 Hospital Segment Outlook | Metric | FY 2024 Outlook | | :--- | :--- | | Net operating revenues | $16,275M to $16,525M | | Adjusted EBITDA | $2,075M to $2,165M | | Inpatient admissions | Up 3.0% to 4.0% | | Adjusted admissions | Up 1.0% to 3.0% | [Financial Statements](index=12&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=12&type=section&id=Consolidated%20Statements%20of%20Operations) The statements show 3.6% revenue growth and a significant increase in net income for the first six months, driven by facility sales Consolidated Statement of Operations - Six Months Ended June 30 ($ in millions) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net operating revenues | $10,471 | $10,103 | | Operating income | $4,046 | $1,207 | | Net gains on sales of facilities | ($2,558) | ($13) | | Income before income taxes | $3,671 | $753 | | Net income | $2,811 | $589 | | Net income available to common shareholders | $2,410 | $266 | | Diluted EPS | $24.22 | $2.47 | Consolidated Statement of Operations - Three Months Ended June 30 ($ in millions) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net operating revenues | $5,103 | $5,082 | | Operating income | $761 | $604 | | Income before income taxes | $587 | $373 | | Net income | $477 | $293 | | Net income available to common shareholders | $259 | $123 | | Diluted EPS | $2.64 | $1.15 | [Consolidated Balance Sheets](index=14&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2024, shows increased cash, reduced long-term debt, and a significant rise in total equity Consolidated Balance Sheet Summary ($ in millions) | Line Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,880 | $1,228 | | Total current assets | $7,955 | $7,167 | | Total assets | $29,265 | $28,312 | | **Liabilities & Equity** | | | | Total current liabilities | $5,493 | $4,760 | | Long-term debt, net | $12,769 | $14,882 | | Total liabilities | $21,396 | $22,804 | | Total equity | $5,056 | $3,117 | | Total liabilities and equity | $29,265 | $28,312 | [Consolidated Statements of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased, while significant proceeds from facility sales drove positive investing cash flow for the first half of 2024 Consolidated Statement of Cash Flows - Six Months Ended June 30 ($ in millions) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,333 | $1,047 | | Net cash provided by (used in) investing activities | $3,134 | ($467) | | *Proceeds from sales of facilities* | *$4,048* | *$16* | | *Purchases of property and equipment* | *($385)* | *($367)* | | Net cash used in financing activities | ($2,815) | ($504) | | *Repayments of borrowings* | *($2,179)* | *($1,437)* | | *Repurchases of common stock* | *($548)* | *($90)* | | Net increase in cash and cash equivalents | $1,652 | $76 | [Segment Reporting](index=16&type=section&id=Segment%20Reporting) This section details the financial performance of the Ambulatory Care and Hospital Operations segments for the first six months of 2024 Segment Financial Data - Six Months Ended June 30, 2024 vs 2023 ($ in millions) | Metric | Segment | 2024 | 2023 | | :--- | :--- | :--- | :--- | | **Net operating revenues** | Ambulatory Care | $2,136 | $1,847 | | | Hospital Operations | $8,335 | $8,256 | | | **Total** | **$10,471** | **$10,103** | | **Adjusted EBITDA** | Ambulatory Care | $841 | $710 | | | Hospital Operations | $1,128 | $965 | | | **Total** | **$1,969** | **$1,675** | | **Adjusted EBITDA margins** | Ambulatory Care | 39.4% | 38.4% | | | Hospital Operations | 13.5% | 11.7% | | | **Total** | **18.8%** | **16.6%** | [Non-GAAP Reconciliations and Disclosures](index=10&type=section&id=Non-GAAP%20Reconciliations%20and%20Disclosures) [Definitions of Non-GAAP Measures](index=10&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company defines non-GAAP measures like Adjusted EBITDA and Free Cash Flow, which management uses to track performance - The company uses non-GAAP measures to track financial and operating performance, compare against peers, and for management incentive compensation[82](index=82&type=chunk) - Key non-GAAP measures are defined, including: - **Adjusted EBITDA:** Net income adjusted for items like interest, taxes, D&A, NCI, gains/losses on sales, and litigation costs - **Adjusted Net Income:** Net income adjusted for items like gains/losses on sales, litigation costs, and their associated tax and NCI impacts - **Free Cash Flow:** Net cash from operating activities less purchases of property and equipment[82](index=82&type=chunk) - Investors are encouraged to use GAAP measures when evaluating financial performance as non-GAAP measures exclude many items and may not be comparable to other companies' metrics[17](index=17&type=chunk) [Reconciliation of Net Income to Adjusted Net Income](index=17&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) This table reconciles GAAP Net Income to Adjusted Net Income, primarily excluding a $2.56 billion net gain on sales of facilities Reconciliation to Adjusted Net Income ($ in millions) | Line Item | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | | Net income available to common shareholders | $2,410 | $266 | | Net gains on sales of facilities | $2,558 | $13 | | Tax and NCI impact of adjustments | ($625) | $7 | | Other adjustments | ($93) | ($79) | | **Adjusted net income available to common shareholders** | **$550** | **$308** | [Reconciliation of Net Income to Adjusted EBITDA](index=18&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) This section reconciles GAAP Net Income to Adjusted EBITDA by adding back items like interest, taxes, depreciation, and facility sale gains Reconciliation to Adjusted EBITDA ($ in millions) | Line Item | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | | Net income available to common shareholders | $2,410 | $266 | | Add: NCI | $401 | $323 | | Add: Income tax expense | $860 | $164 | | Add: Interest expense | $421 | $447 | | Add: Depreciation & amortization | $416 | $430 | | Less: Net gains on sales of facilities | ($2,558) | ($13) | | Other adjustments | $13 | $58 | | **Adjusted EBITDA** | **$1,969** | **$1,675** | [Reconciliation of Cash Flow to Free Cash Flow](index=19&type=section&id=Reconciliation%20of%20Cash%20Flow%20to%20Free%20Cash%20Flow) This reconciliation details the calculation of Free Cash Flow from operating cash flow, showing $948 million for the first half of 2024 Reconciliation to Free Cash Flow - YTD June 30 ($ in millions) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,333 | $1,047 | | Purchases of property and equipment | ($385) | ($367) | | **Free cash flow** | **$948** | **$680** | | Payments for restructuring, etc. | $64 | $78 | | **Adjusted free cash flow** | **$1,012** | **$758** | [Outlook Reconciliations](index=20&type=section&id=Outlook%20Reconciliations) These tables provide reconciliations for the company's 2024 financial outlook, bridging projected GAAP and non-GAAP measures FY 2024 Outlook Reconciliation: Net Income to Adjusted EBITDA ($ in millions) | Line Item | Low | High | | :--- | :--- | :--- | | Net income available to common shareholders | $2,825 | $2,930 | | Adjustments (Taxes, Interest, D&A, etc.) | ($2,558) | ($2,558) | | Less: Net gains on sales of facilities | $2,558 | $2,558 | | Other adjustments | $735 | $845 | | **Adjusted EBITDA** | **$3,825** | **$3,975** | FY 2024 Outlook Reconciliation: Net Income to Adjusted Net Income ($ in millions) | Line Item | Low | High | | :--- | :--- | :--- | | Net income available to common shareholders | $2,825 | $2,930 | | Less: Net gains on sales of facilities | ($2,558) | ($2,558) | | Other adjustments & tax impact | $753 | $718 | | **Adjusted net income available to common shareholders** | **$1,020** | **$1,090** | FY 2024 Outlook Reconciliation: Operating Cash to Adjusted Free Cash Flow ($ in millions) | Line Item | Low | High | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,900 | $2,250 | | Purchases of property and equipment | ($800) | ($900) | | **Free cash flow** | **$1,100** | **$1,350** | | Payments for restructuring, etc. | $125 | $75 | | **Adjusted free cash flow** | **$1,225** | **$1,425** |

The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. As such, the Zacks rating upgrade for Tenet is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price. The change in a company's future earnings potential, as reflected in earnings estimate revisions, ...

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor. What are the Zacks Style Scores? Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance t ...

Market participants will be closely following the financial results of Tenet Healthcare in its upcoming release. The company plans to announce its earnings on July 24, 2024. The company is forecasted to report an EPS of $1.89, showcasing a 31.25% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.98 billion, down 2.03% from the yearago period. Additionally, investors should keep an eye on any recent revisions to ...

Core Viewpoint - Tenet Healthcare Corporation (THC) is expected to report strong second-quarter earnings, with a consensus estimate of $1.89 per share, reflecting a 31.3% year-over-year growth, despite a slight decline in revenues [1][3]. Financial Performance - The Zacks Consensus Estimate for second-quarter revenues is nearly $5 billion, indicating a 2% decrease from the previous year [1]. - The adjusted patient admissions are projected to grow by 1.3% year-over-year, supported by the resumption of elective procedures [2][9]. - The Ambulatory Care segment is anticipated to show significant growth, with operating revenues expected to rise by 10.1% to 11.7% compared to the prior year [7]. Earnings Expectations - THC has a positive Earnings ESP of +4.11%, with the most accurate estimate at $1.97 per share, suggesting a likely earnings beat [5]. - The company has a strong track record of exceeding earnings estimates, achieving an average beat of 56.5% over the last four quarters [4]. Operational Insights - The average length of stay in hospitals is expected to increase by 3.4%, contributing to higher patient days, which are projected to rise by 5% year-over-year [8][9]. - The consensus estimate for net patient revenues per adjusted admission indicates nearly 6% growth year-over-year [8]. Strategic Direction - Tenet Healthcare is focusing on divesting non-core businesses and reallocating capital to high-margin operations, particularly in acute surgery and the Ambulatory Care segment [18][21]. - The company is actively acquiring assets to enhance profitability and is well-positioned to benefit from an aging population and increasing admissions [18][21]. Market Performance - THC's stock has increased by 74.3% year-to-date, significantly outperforming the industry average of 19.6% and the S&P 500's 15% growth [16]. - The current valuation of THC is slightly above the industry average, trading at 15.04X forward 12-month earnings compared to the industry's 14.51X [17].

THC's full-year Zacks Consensus Estimates are calling for earnings of $8.70 per share and revenue of $20.35 billion. These results would represent year-over-year changes of +24.64% and -0.95%, respectively. The most recent trading session ended with Tenet Healthcare (THC) standing at $131.75, reflecting a -1.26% shift from the previouse trading day's closing. The stock's change was less than the S&P 500's daily loss of 0.78%. Elsewhere, the Dow lost 1.29%, while the tech-heavy Nasdaq lost 0.7%. Analysts and ...

Tenet Healthcare (THC) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future. Shares of this hospital operator have returned -3% over the past month versus the Zacks S&P 500 composite's +2.1% change. The Zacks Medical - Hospital industry, to which Tenet belongs, has lost 3.5% over this period. Now the key question is: Where could the stock be headed in the near term? Whi ...

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 24. On the other hand, if they miss, the stock may move lower. Zacks Consensus Estimate Revenues are expected to be $4.98 billion, down 2% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 2.62% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassesse ...

The latest trading session saw Tenet Healthcare (THC) ending at $134.39, denoting a +0.49% adjustment from its last day's close. The stock lagged the S&P 500's daily gain of 0.55%. Elsewhere, the Dow gained 0.62%, while the tech-heavy Nasdaq added 0.63%. The upcoming earnings release of Tenet Healthcare will be of great interest to investors. The company's earnings report is expected on July 24, 2024. The company's earnings per share (EPS) are projected to be $1.84, reflecting a 27.78% increase from the sam ...

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both. What are the Zacks Style Scores? The Style Scores are broken down into four categories: Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and histori ...