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Aetna, HCA Healthcare and Tenet Healthcare post 1Q results, with Tenet surging on swing to profit

Last updated: 11:23 01 May 2018 EDT, First published: 10:55 01 May 2018 EDT

surgeon in operating room
Aetna benefitted in the latest first quarter from positive effects of the Trump tax cuts

Healthcare concerns Aetna Inc. (NYSE:AET), HCA Healthcare Inc. (NYSE:HCA) and Tenet Healthcare Corp. (NYSE:THC) have posted first-quarter results, with shares of Tenet surging on a swing to a profit from a year-earlier loss.

The stock of Tenet was up around 15% in late-morning trading, at US$27.60 a share, after the Dallas-based operator of hospitals reported net income in the latest first quarter of US$99mln, or $US0.96 a share, compared to a net loss of US$53mln, or US$0.53 a share, in the first quarter of 2017.

Revenue at Tenet slid 2.4%, to US$4.7bn from US$4.81bn.

"The actions we have taken to be a more efficient, agile and decisive organization have resulted in stronger financial performance," said Ronald A. Rittenmeyer, Tenet executive chairman and CEO.

Tenet said adjusted EBITDA in its hospital segment climbed 30%, to US$402mln from US$309mln in the first quarter of 2017. It said the big improvement was driven by a US$64mln increase in California Provider Fee revenue, as well as a favorable adjustment to malpractice and workers’ compensation expenses and "strong cost management within the company’s hospital operations and corporate overhead functions."

HCA Healthcare posts solid earnings gain

At HCA Healthcare, first-quarter net income at the operator of hospitals and surgery centers surged 73% to US1.14bn, or US$3.18 a share, from US$659mln, or US$1.74 a share, in the first quarter of 2017.

HCA said results in the latest first quarter include gains on sales of facilities of US$405mln, or US$0.85 per share, and a tax benefit of US$92mln, or US$0.26 per share. Earnings in last year's first quarter included US$67mln, or US$0.18 per share, related to employee equity award settlements.

HCA said adjusted EBITDA totaled $2.12bn, up 5.6% from US$2.01bn in the first quarter of 2017.

Oppenheimer said the results at HCA were relatively in line with its estimates. Oppenheimer gives HCA an Outperform rating with $110 price target.

Shares of HCA were down around 2% in late-morning trading, at US$93.80 a share.

Aetna reports higher earnings on flat revenue

At Aetna, the giant insurer reported first-quarter net income of US$1.21bn, or US$3.67 a share, compared to a net loss of US$381mln, or US$1.11 a share, in the year-earlier quarter. Aetna said the difference in its bottom-line results was due in large part to the termination in last year's first quarter of the Humana Inc. (NYSE:HUM) merger agreement and the favorable effect in this year's first quarter of the Trump tax cuts.

Aetna said adjusted earnings rose 12%, to US$1.05bn, or US$3.19 a share, from US$939mln, or US$2.71 a share.

Shares of Aetna essentially were unchanged in late-morning trading.

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