Tenet Healthcare Corporation (THC) Earnings: An Early Look

Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Tenet Healthcare Corporation (NYSE:THC) is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Tenet Healthcare Corp (NYSE:THC)

The medical-care industry has gone through massive changes in the past few years as health-care reform has fundamentally changed the market. With potentially millions of newly insured patients, can Tenet take advantage of the opportunity from Obamacare? Let’s take an early look at what’s been happening with Tenet Healthcare over the past quarter and what we’re likely to see in its quarterly report on Tuesday.

Stats on Tenet Healthcare

Analyst EPS Estimate $0.68
Change From Year-Ago EPS 42%
Revenue Estimate $2.34 billion
Change From Year-Ago Revenue (2.8%)
Earnings Beats in Past 4 Quarters 2

Source: Yahoo! Finance.

Will Tenet Healthcare give investors some healing this quarter?
Analysts have recently gotten more optimistic about Tenet’s long-term prospects, raising their full-year 2013 estimates by more than a nickel per share. Shareholders have been even more enthusiastic, with the stock up nearly 40% since mid-November.

Fears about the impact of the Affordable Care Act have rippled across the health-care industry ever since the law first passed. Yet even with the Supreme Court upholding the law during the summer, 2012 was an extremely strong year for hospital stocksHCA Holdings Inc (NYSE:HCA) and Community Health Systems (NYSE:CYH) posted even stronger gains than Tenet did, as they anticipated better conditions resulting in part from the act’s provisions, especially beginning in 2014. The successful resolution of the fiscal cliff also helped HCA, Community Health, and Tenet by avoiding what could have been a 27% cut in Medicare reimbursement rates.

Contrary to some popular opinion, Tenet actually expects Obamacare to help it going forward. In January, CEO Trevor Fetter said that mandates to carry health insurance and expansion of Medicaid coverage will reduce its exposure to uninsured patients. With Tenet, HCA, and Community Health all carrying bad-debt provisions for those without insurance, the new law could help them eventually eliminate those provisions, boosting earnings.

Because many of these favorable provisions haven’t taken effect yet, you should take backward-looking numbers from Tenet’s quarterly report with a grain of salt. With the business due to improve in the coming years, the big issue to focus on will be whether Tenet’s acquisition strategy will help it set the stage for even larger growth in the future. Even with big share-price gains, Tenet and its peers all look like promising investments for the years ahead.

The article Tenet Healthcare Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!