Here are five key quotes from the third-quarter earnings call, as transcribed by Seeking Alpha:
1. Tenet Executive Chairman and CEO Ronald A. Rittenmeyer on disappointing results for the company’s hospital segment: “My view as CEO is that we had a solid quarter in Conifer and USPI, and we fell short in hospital operations. … Make no mistake, growth and operational excellence are my top priorities as it relates to hospital operations. While we had some headwinds in all the malpractice settlements this quarter, as well as an impact from prior hospital divestitures, our growth is not acceptable.”
2. Mr. Rittenmeyer on USPI’s strong performance: “In our ambulatory segment, USPI’s financial performance was strong in this quarter with adjusted EBITDA less facility-level NCI up 11.5 percent. This was driven by solid performance both in the surgical and non-surgical areas of the business. Overall, a great quarter and we feel very good about our position in the market and as part of our overall portfolio.”
3. Mr. Rittenmeyer on USPI’s joint venture with West Reading, Pa.-based Tower Health: “We have deployed roughly $130 million on the ambulatory acquisitions to the third quarter and will be between $225 million and $250 million by the end of the year. This will provide a nice tailwind to USPI’s growth in 2019.”
4. Tenet CFO Daniel J. Cancelmi on unexpected losses in the third quarter: “As you think about these three items impacting other operating expenses, we did not forecast the $20 million of losses on risk-based contracts, or the $16 million gain on asset sale. Also, malpractice expense was about $30 million more than we had anticipated in our [third-quarter] forecast, which was a key reason why our results were lower than we had anticipated this quarter.”
5. Mr. Cancelmi on USPI’s outlook for 2019: “As Ron mentioned, we expect USPI to deploy $225 million to $250 million on acquisitions this year, providing a strong foundation for USPI’s continued growth next year.”
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