Investing.com -- Shares in Tenet Healthcare Corporation (N:THC) fell nearly 4% in after-hours trading after one of the nation's largest hospital management companies reported mixed results with its fourth quarter results.
Tenet Healthcare, a Dallas-based company, blamed the subpar results in part on the negative effects of timing differences in relation to its California Provider Fee program over the last two fiscal years. During the 2014 calendar year, as well as the fourth quarter of 2014, Tenet recorded $150 million in revenue related to the program. Of the total amount, $112 million was earned over the first three quarters of 2014 since the program was not approved until the final three months of the year. In 2015, the company earned $166 million on a comparable hospital basis, including $42 million in the final quarter. Discounting the $112 million earned from out-of-period revenues in the fourth quarter of 2014, Tenet increased its same-hospital net patient revenue per adjusted admission by 3.2% for the period.
By the same vein, Tenet saw its Adjusted EBITDA decrease $33 million or 5.1% for the quarter. When the provider fee was not accounted for, Tenet increased its Adjusted EBITDA by $91 million or 17.4% Tenet's net operating revenue in hospital operations increased 8% to $16.928 billion, up from $15.681 billion a year earlier.
“We delivered Adjusted EBITDA at the midpoint of our Outlook for the fourth quarter and are on a path to deliver strong growth in Adjusted EBITDA and improved Adjusted Free Cash Flow in 2016,” said Trevor Fetter, Tenet Healthcare's chairman and chief executive officer. “Similar to our results in the third quarter, we experienced pressure on lower acuity inpatient hospital admissions and continued to drive increases in higher-acuity admissions."
"Our Conifer Health Solutions and United Surgical Partners subsidiaries performed well, with Conifer meeting our expectations and USPI delivering stronger-than-expected results in the fourth quarter," Fetter added.
Moving forward, Tenet anticipates sales in the range of $18.8 billion and $19.2 billion for 2016 as a whole on adjusted earnings per diluted share of $1.18 a share to $2.25 a share. Analysts expect revenues of $19 billion.
Shares in Tenet Health Care fell 0.99 or 3.88% to 24.50 in after-hours.