Tenet Healthcare Corp., Santa Barbara, Calif., told investors to expect volatility in the company's financial results despite a better-than-expected performance for the first quarter. Tenet lost $122 million, or 26 cents per share, for the quarter ended March 31, compared with a loss of $20 million, or 4 cents per share, in the year-ago quarter. Revenue from continuing operations fell 2.9% to $2.67 billion. The company last week said it expected to report a $117 million loss. But an arbitrator subsequently awarded an unidentified managed-care payer $8 million in a dispute that Tenet said dated to 1996, resulting in an additional $5 million after-tax loss. Before charges for discontinued operations and restructuring, Tenet earned 5 cents per share, better than analysts' break-even prediction.
Besides the continuing volatility in financial results, investors also should expect that the multiple federal investigations into the company's pricing, physician relationships and other business practices will take years to sort out, said Trevor Fetter, Tenet's president and chief executive officer. "I believe that we have succeeded in changing the tone with government ... but we would be getting way ahead of ourselves to talk about when a settlement might be," Fetter said, answering a question during a conference call with investors and analysts. Tenet owns or operates 98 hospitals, 31 of which it is divesting. The company plans to open two new hospitals this quarter. -- by Vince Galloro