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(Reuters) – Tenet Healthcare Corp, which reported a smaller-than-expected quarterly loss on Monday, said it would sell three of its Houston-based hospitals to larger rival HCA Holdings Inc.
The U.S. for-profit hospital operator also said all of its hospitals and hospital-affiliated outpatient centers and employed physicians would be phased back into insurer Humana Inc’s network between June and October.
Tenet and Community Health Systems Inc, which also posted better-than-expected quarterly results, have been looking to turn their businesses around by selling off assets in the past few months to ease debt load.
Tenet shares jumped more than 13 percent to $17.40 and Community Health’s shares rose 6.6 percent to $9.19 in aftermarket trading.
Tenet, which had long-term debt of about $15 billion as of March 31, has been implementing cost-cutting programs, focused on raising hospital segment margins to turn its business around.
Community Health has a debt load of $14.69 billion and the company had said in February it would divest 25 hospitals.
Net loss attributable to Tenet’s shareholders narrowed to $53 million, or 53 cents per share, in the first quarter ended March 31, from $59 million, or 60 cents per share, a year earlier.
Excluding items, Tenet reported a loss of 27 cents per share, while analysts’ on average expected a loss of 51 cents per share, according to Thomson Reuters I/B/E/S.
Tenet’s net operating revenue fell to $4.81 billion from $5.04 billion.
Excluding items, Community Health earned 8 cents per share from continuing operations, beating the average analyst estimate of 6 cents per share.
HCA Holdings Inc, the largest of the for-profit hospital operators in the United States, is scheduled to report earnings on Tuesday.
Reporting by Akankshita Mukhopadhyay and Ankur Banerjee in Bengaluru; Editing by Martina D’Couto
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