DOW JONES NEWSWIRES
Tenet Healthcare Corp. (THC) lowered its 2009 revenue outlook
because of weaker-than-expected admissions and said it plans to
offer $450 million in 10-year senior notes as part of a plan to
improve its financial flexiblity.
Still, shares rose 7.2% premarket to $3.89 as the hospital
operator left its earnings target unchanged thanks to cost cuts and
other factors. The stock through Friday had more than tripled this
year.
Last week, Tenet began a tender offer to purchase as much as $1
billion of senior notes that mature in 2014. The company has been
trying to turn itself around following years of financial and legal
trouble, cutting costs and conducting debt exchanges. Meanwhile,
hospitals in general have been cutting back on capital spending and
taking other measures to conserve cash as rising unemployment
threatens to increase the ranks of the uninsured and consumers put
off elective procedures.
The company now sees net operating revenue up 3% to 5%, down one
percentage point from its prior forecast, with adminssion now seen
flat to down 1%. Tenet said in February that it was expecting flat
to up 1%. The lowered outlook comes after Tenet said last month
that it was dealing with lower-than-expectded profitable commercial
managed-care admissions.
Through the first eight full weeks of the second quarter, Tenet
said Monday that total admissions were down 0.6%, with a 7% drop
from commercially insured patients more than offsetting 1.5% growth
from government-covered people.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com