Executives at Tenet Healthcare Corp. and OrNda HealthCorp said their latest quarterly earnings were healthy as the two companies got set to complete their proposed $3.1 billion merger later this month.
Nashville, Tenn.-based OrNda reported a 33% increase in net income to $26.4 million, or 44 cents per share, for its first quarter ended Nov. 30. That compares with net income of $19.6 million, or 39 cents per share, in the year-ago quarter. Revenues rose 29% to $637.1 million.
Santa Barbara, Calif.-based Tenet reported a 58% dip in quarterly net income, but executives played down the drop, attributing it to gains the company made in 1995 from sales of various facilities and investments. They pointed out that operating income rose 18% in the quarter.
Tenet reported net income of $76.8 million, or 35 cents per share, for its second quarter ended Nov. 30. That compares with net income of $182.8 million, or 85 cents per share, in the year-ago quarter. Revenues grew 8% to $1.5 billion.
For the six months, Tenet reported a 50% drop in net income to $149.2 million, or 68 cents per share, from $301.1 million, or $1.41 per share, in the year-ago period. Revenues rose 10% to $2.9 billion.
Tenet and OrNda will have special shareholder meetings Jan. 28 in their respective home cities to approve their proposed merger. Last October, Tenet said it would acquire OrNda in a $1.8 billion stock swap and assume $1.3 billion of OrNda's debt.
Tenet executives said they hadn't yet reached an agreement with the Federal Trade Commission, which made a second request for information regarding possible anti-competitive effects of the deal. Executives said negotiations with the FTC, which are likely to result in the divestiture of at least one hospital in California, won't derail the close of the merger.
A combination of Tenet and OrNda would control three of the five hospitals and about 93% of the staffed beds in San Luis Obispo County, Calif., about 200 miles north of Los Angeles. The new company would operate 126 hospitals in 22 states, and combined annual revenues would be more than $5.5 billion.