Tenet looks to sell Conifer business, cut more costs

By The Associated Press Markets Associated Press

Tenet Healthcare aims to expand its cost-cutting plan, sell a business and continue shaking up its board mix as the hospital chain seeks firmer financial footing.

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The company said Tuesday that it will increase the size of a previously announced cost-reduction plan by $100 million and try to sell its Conifer business, which provides revenue cycle management services. It also said it will keep looking for independent directors to refresh its board composition. Tenet currently has 12 directors, five of whom have joined the board since November 2016.

New CEO Ronald Rittenmeyer said in a statement that the company was taking "aggressive actions to improve financial performance." Rittenmeyer took over in September from long-time leader Trevor Fetter.

Dallas-based Tenet Healthcare Corp. reported a third-quarter loss of $367 million in October.

The company also said Tuesday that it expects adjusted earnings before interest, taxes, depreciation and amortization — or EBITDA — of $2.475 billion to $2.575 billion in 2018, with operating revenue ranging from $17.8 billion to $18.2 billion.

Analysts expect, on average, EBITDA of nearly $2.48 billion on $18.53 billion in revenue, according to FactSet.

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Shares of Tenet climbed about 2 percent, or 36 cents, to $15.10 in late-morning trading, while the Standard & Poor's 500 index slipped.

The possible Conifer sale likely boosted company's shares, said Sheryl Skolnick, an analyst for Mizuho Securities USA. But she said in a research note that the business is a "challenged asset" that Tenet may have a hard time selling.