DALLAS (AP) -- Hospital operator Tenet Healthcare Corp. said Wednesday that its net income climbed in the third quarter on an increase in admissions, particularly outpatient procedures.
Tenet shares rose nearly 10 percent in afternoon trading as the re-election of President Obama gave a boost to hospital stocks.
Tenet, which runs 49 hospitals and about 100 outpatient facilities, reported strong growth in outpatient surgery and emergency room visits. It said adjusted admissions, a figure that includes both inpatient admissions and outpatient procedures, rose 1.4 percent from a year ago.
The company said its net income grew to $40 million, or 37 cents per share, from $6 million, or 5 cents per share. Net revenue, which subtracts the funds Tenet sets aside for doubtful accounts, rose 6 percent, to $2.22 billion from $2.1 billion. Its adjusted earnings before interest, taxes, depreciation and amortization rose 40 percent to $269 million.
Analysts were expecting Tenet to report income of 33 cents per share and $2.23 billion in revenue, according to FactSet. Average estimates called for EBITDA of $269.4 million.
Tenet shares rose $2.36, or 9.5 percent, to $27.32. Hospital stocks avoided a sell-off in broader markets Wednesday after President Obama was elected to a second term and Democrats appeared to make small gains in both houses of Congress, ensuring the preservation of the 2010 health care overhaul law. By 2014 the law is expected to extend health insurance to 30 million people who lacked insurance when it was passed. That's good for hospitals because they will see more patients and more of those patients' bills will be covered by insurance.
Tenet tweaked its forecasts because a California health care provider fee program probably won't be approved this year. Tenet had expected to get about $40 million in EBITDA from that program, and now expects to get that money in 2013 instead. The company forecast adjusted EBITDA of $313 million to $353 million in the fourth quarter and $1.33 billion to $1.43 billion in 2013
Analysts were expecting $403.3 million in the fourth quarter and $1.32 billion in 2013 on average.