Tenet provides 2012 earnings outlook
Tenet Healthcare Corporation today projected that its 2012 adjusted earnings before interest, taxes and depreciation (EBITDA) would be in the range of $1.2 billion to $1.3 billion, a moderate uptick from its expected EBITDA for 2011.
The company will provide a more detailed description of its 2012 outlook on February 28, when it will provide 2011 fourth quarter and year-end results.
“Our core strategies for growing and deepening our physician relationships, achieving additional cost efficiencies through our Medicare Performance Initiative, acquiring outpatient centers and growing our Conifer services business are all working effectively,” said Trevor Fetter, Tenet president and CEO in a press release. “These growth strategies have more than offset pressures on government reimbursement and other effects of a soft economic environment.”
[See also: No deal: Tenet rejects Community Health Systems' 'best and final offer' of $7.25 per share.]
The company also provided some insight into its coming Q4 earnings release by noting that it remained uncertain whether the company will be able to record certain “favorable pending reimbursement settlements.” Tenet said that reaching its 2011 EBITDA projections of $1.175 billion to $1.275 billion will require receiving these reimbursements. This disclosure comes four months after the company announced that its 2011 EBITDA would fall “at the lower end” of this range.
Some adverse advents will also be included in the Q4 earnings, including the deferred recognition of $12 million in HIT incentive payments from the federal government due to a change in accounting methods and another $7 million related to a decline in interest rates. Results for the fourth quarter of 2011 also will reflect a slight increase in admissions and approximately flat outpatient visits relative to the fourth quarter of 2010 and the recording of a $28 million net favorable impact related to the California Provider Fee Six-Month program, which received all necessary approvals prior to year end.
[See also: Tenet, Aetna renew national multi-year agreement.]
The 2012 outlook includes the adverse impact from the aforementioned accounting change, which defers the recognition of certain HIT incentive payments. The result of this change, the company noted, will result in a decrease of $31 million of recognized income that would have been recognized prior to the change.
Looking further out, the company confirmed its 2013 outlook of $1.335 billion to $1.535 billion and confirmed its outlook for 2015, which includes the increased coverage of the uninsured due to reform, at $1.75 billion to $2.25 billion.
