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Community Health (CYH) Q2 Loss Narrower than Expected (Revised)

Community Health Systems, Inc. CYH reported adjusted loss of 25 cents per share in the second quarter of 2017, which was narrower than the Zacks Consensus Estimate of a loss of 26 cents.

Net loss attributable to the common stockholders was $137 million or $1.22 per diluted share, narrower than the net loss of $1.432 billion or $12.91 per share incurred in the year-ago quarter

Quarterly Operational Update

In the second quarter, net operating revenue of $4.14 billion surpassed the Zacks Consensus Estimate by 2.5% but decreased 9.7% year over year. On a same-store basis, net operating revenue decreased 0.7% during the three months ended Jun 30, 2017, year over year.

The second quarter witnessed a 10.8% decrease in total admissions and an 11.2% fall in total adjusted admissions, year over year. On a same-store basis, both admissions and adjusted admissions decreased 2.5% from the year-ago quarter.

In the reported quarter, total operating expenses declined 32% to $4 billion, primarily due to lower salaries and benefits paid to employees, supplies, depreciation & amortization-related expenses and other operating costs.

Community Health Systems, Inc. Price, Consensus and EPS Surprise

Financial Update

As of Jun 30, 2017, the company’s total assets declined 5% from year-end 2016 to $20.8 billion. Cash and cash equivalents grew over 200% to $768 million from year-end 2016.

The company paid off a substantial portion of its debt through divestures. It had long-term debt of $14.7 billion as of Jun 30, 2017, down 0.6% year over year.

Total shareholders’ equity was $1.4 billion as of Jun 30, 2017, down 19.4% from year-end 2016.

Cash flow from operations was $503 million at the end of the second quarter, down 20.4% year over year.

2017 Guidance

Community Health expects net operating revenue (less provision for bad debts) in the range of $15.85 billion to $16.05 billion.

The company projects adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for 2017 in the range of $1.825–$2 billion.

Weighted-average diluted shares are expected in the band of $112–$113 million.

Zacks Rank and Performance of Other Insurers

Community Health presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among the other firms in the medical sector that have reported second-quarter earnings so far, the bottom lines of Centene Corp. CNC, Anthem Inc ANTM and UnitedHealth Group Inc. UNH beat their respective Zacks Consensus Estimate.

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(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)

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