Hospital operator Tenet Healthcare Corp. said Tuesday its first quarter earnings fell 17 percent largely due to increased income taxes that offset admissions gains.
The Dallas company, which is the target of a hostile takeover bid by rival Community Health Systems Inc., earned $73 million, or 14 cents per share in the three months that ended March 31. That compares to earnings of $88 million, or 17 cents per share, in the same quarter last year.
Revenue climbed 7 percent to $2.5 billion.
Analysts surveyed by FactSet expected, on average, earnings of 13 cents per share on $2.48 billion in revenue.
Tenet operates 49 hospitals in 11 states, mostly in the Southeast and Texas. It also runs 84 outpatient centers.
The company said admissions increased less than 1 percent to 133,349 compared with last year's first quarter, after the company saw year-over-year declines in the final two quarters of 2010. Outpatient visits grew 6.1 percent, and surgeries rose about 1 percent.
Bad debt expense fell nearly 4 percent to $182 million, and income tax expense rose to $51 million from $3 million.
Tenet and Community Health, based in Franklin, Tenn., have been haggling over a possible acquisition since last fall. Last month, Tenet's board rejected a $6 per-share, all-cash offer valued at about $3.36 billion.
On Monday, Community Health raised its offer to about $4.06 billion, or $7.25 per share, but said it will expire May 9 unless it sees meaningful engagement from Tenet. Tenet said it will review the proposal.
Community took an offer of $5 per share in cash and $1 per share to Tenet shareholders in December after Tenet's board also rejected that bid. Community has said it will nominate its own slate of directors to Tenet's board.
Tenet, meanwhile, has announced plans to adopt a "poison pill" stock distribution measure to deter the takeover bid, and it delayed its annual meeting. It also filed a lawsuit against Community Health last month, questioning the company's admitting standards, which Tenet said led to artificial inflation of Community Health's stock price.
Tenet shares fell 4 cents in Tuesday morning premarket trading to $6.65.