Tenet Healthcare Corp., Dallas, reported its best operating margin in any quarter in seven years and its best first-quarter operating earnings in that period, as cost control and higher pricing and acuity offset lower volume.
Tenet reports strongest 1Q operating earnings in seven years
Tenet recorded net income of $88 million for the quarter, compared with $178 million in 2009's first quarter. The year-ago quarter, however, included a $134 million pre-tax gain from the early repayment of debt. Revenue increased 3.4%, to $2.34 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $298 million for the quarter, up 7.2% compared with 2009's first quarter; the EBITDA margin was 12.7%, up from 12.3% a year ago.
Admissions declined 2% and adjusted admissions declined 1.1%, comparing the quarters in both cases, Tenet said. A study of Tenet's market share in several key states found that it was improving slightly in most, with only a small decline in North Carolina, said Steve Newman, chief operating officer.
“We've clearly put all of the cleanup and all of the legacy issues behind us. We're operating the company where we're building volume, getting fair and appropriate pricing and controlling costs,” Tenet President and CEO Trevor Fetter said. Volume remains the top challenge, he added.
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