Tenet Healthcare to explore sale of its tech and financial services unit Conifer

Tenet Healthcare Corporation.
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Tenet Healthcare Corporation.

Tenet Healthcare, under pressure from an activist investor, said on Tuesday it would explore a sale of its Conifer unit, and increase the size of its plan to cut costs by $100 million by the end of 2018.

The news comes nearly two months after the hospital operator said it would lay off about 1,300 employees in order to save $150 million next year. Tenet now expects total cost cuts of $250 million by the end of 2018.

Tenet, which has long-term debt of about $15 billion as of June 30, has been cutting costs and focusing on raising hospital segment margins to turn its business around.

The decision to explore a sale of Conifer came after Tenet's biggest shareholder, Glenview Capital Management, pulled its two representatives off the company's board in August citing "irreconcilable differences" over strategy.

Conifer provides technology and financial services to hospitals and healthcare companies.

Tenet said on Tuesday it expects an adjusted profit per share attributable to the company's shareholders at between $1.07 to $1.36 in 2018.

Analysts on average were expecting a profit of $1.27 per share, according to Thomson Reuters I/B/E/S.

The company also forecast net operating revenue at between $17.8 billion and $18.2 billion, missing analysts' estimate of $18.90 billion.

Tenet's shares were down about 3 percent at $14.30 in light premarket trading.