- Dallas-based Tenet’s net income fell 71% in the third quarter to $131 million, compared to $448 million the same time last year, according to its earnings report out Thursday.
- The chain met Wall Street expectations on revenue at $4.8 billion, down 2% from the prior-year period.
- Tenet lowered its full-year guidance, and labor costs were up slightly — a reversal for the operator that has seen declines in recent quarters unlike its other for-profit peers.
Tenet faced lower volumes across the board from the same time last year during its third quarter as it continued dealing with fallout from a major cyberattack in April.
In Q3, hospital outpatient visits were down 6.9% year over year, emergency room visits were down 4.1% and hospital surgeries were down 3.6%.
Same hospital net patient service revenue per adjusted admission fell 4.2% year over year, mostly due to lower COVID-19-related acuity and lower COVID-19 volumes, the company said in its earnings release.
COVID-19 admissions accounted for about 6% of total admissions in the third quarter, compared to about 10% during the same time last year.
Despite lower year-over-year volumes, SVB Securities analysts wrote in a note that Tenet experienced high growth rates in volumes from the second to third quarter. During that period, admissions rose 3.8%, they wrote.
Tenet’s ambulatory service center business fared slightly better, with cases flat and net revenue per case up 3% year over year.
Labor costs were up slightly though, with salaries, wages and benefits expenses at $2.23 billion, compared to $2.2 billion during the same time last year.
Through July, nearly 10% of the chain’s clinical staff were out at some point with the omicron variant, CEO Saum Sutaria said on a call with investors Friday. Contract labor spending rose as a result, he said.
Staffing shortages have brought ongoing challenges for hospital operators during the pandemic, more recently impacting their ability to operate at full capacities, a recent survey from Kaufman Hall found.
Two-thirds of respondents in that survey said shortages caused them to operate below full capacity.
Tenet ultimately lowered its guidance on the results, now expecting full year revenues of $19 billion to $19.2 billion. It previously expected $19 billion to $19.4 billion in full-year revenues.