(Reuters) – Tenet Healthcare Corp on Monday raised its annual profit forecast after a strong second quarter, betting on a recovery in surgical procedure volumes, sending its shares up 3% in extended trading.
The hospital operator sees its 2023 core earnings in the range of $3.31 million to $3.46 million, compared with its previous forecast of $3.2 million to $3.4 million.
It expects to adjusted profit per share in the range of $5.18 to $6.03 in 2023, compared with a prior forecast of $4.92 to $6.09.
Hospital operators are expected to see a profit boost as more people opt for surgical procedures such as hip and knee replacements that were otherwise delayed due to the pandemic.
Tenet is betting on growth in its ambulatory care unit, which deals with patients who are not bedridden and do not require overnight hospitalization.
It expects a 5% to 6% rise in surgical cases volumes for the year from an earlier forecast of 3% to 4%
Major insurers such as UnitedHealth Group and Humana have warned of higher medical costs due to a jump in non-urgent surgeries in the United States, highlighting demand for such procedures, especially by older adults.
Larger rival, HCA Healthcare, the biggest for-profit hospital U.S. operator, also raised its full-year adjusted core earnings forecast to between $12.3 billion and $12.8 billion, from prior expectations of between $12.1 and $12.7 billion.
On an adjusted basis, Tenet reported a net income of $1.44 per share for the quarter ended June, beating estimates of $1.25 per share.
The company posted net operating revenue of $5.08 billion, above estimates of $4.91 billion.
(Reporting by Sriparna Roy in Bengaluru; Editing by Maju Samuel)