Tenet Sinks Most Since 2011 as Forecast Misses Estimates

Tenet Healthcare Corp. (THC), the operator of 77 hospitals and 176 outpatient centers, sank the most in almost two years after its fourth-quarter forecast was less than analysts’ estimates because of slow patient admissions.

Tenet dropped 9.2 percent to $43.82 at 10:07 a.m. New York time, after touching $43.37 in the biggest intraday decline since December 2011. The shares of the Dallas-based company had gained 49 percent this year through yesterday.

Tenet forecast fourth-quarter earnings before interest, taxes, depreciation and amortization of as much as $450 million, excluding some items, in a statement yesterday. That was less than analysts’ average $482 million estimate, Frank Morgan, an analyst with RBC Capital Markets, wrote in a research note today.

“Management’s fourth-quarter 2013 guidance is below consensus and reflects continued soft inpatient volumes,” Morgan wrote, also pointing out a difficult reimbursement environment and the completion of Tenet’s $1.8 billion acquisition of Vanguard Health Systems Inc. The forecast, he said, “assumes minimal synergies captured in the fourth-quarter 2013.”

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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