Tenet Healthcare Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Tenet Healthcare (NYSE:THC) will unveil its latest earnings on Wednesday, November 7, 2012. Tenet Healthcare is an investor-owned health care services company that mainly operates general hospitals and related health care facilities.

Tenet Healthcare Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 36 cents per share, a rise of more than twofold from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 35 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 36 cents during the last month. For the year, analysts are projecting profit of $2.34 per share, a rise of 8.3% from last year.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by 20 cents, reporting net income of 40 cents per share against a mean estimate of profit of 20 cents. In the first quarter, the company exceeded forecasts by 20 cents with net income of 52 cents versus a mean estimate of profit of 32 cents.

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Stock Price Performance: Between August 8, 2012 and November 1, 2012, the stock price rose $20.19 from $5.21 to $25.40 following a 1 for 4 reverse split on 10/11/12. It saw one of its worst periods between July 13, 2012 and July 25, 2012 when shares fell for nine straight days, dropping 14.6% (-75 cents) over that span.

A Look Back: In the second quarter, the company swung to a loss of $2 million (4 cents a share) from a profit of $61 million (11 cents) a year earlier, but beat analyst expectations. Revenue fell 4.6% to $2.27 billion from $2.37 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 3.4% in revenue from the year-earlier quarter to $2.29 billion.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 29.1% in the fourth quarter of the last fiscal year and 6.2% in first quarter before falling again in the second quarter.

Analyst Ratings: There are mostly holds on the stock with 12 of 15 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.37 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.35 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 3.3% to $2.56 billion while liabilities rose by 1.7% to $1.87 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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