Post Earnings Coverage as Community Health Exceeded Earnings Expectations; Adjusted EBITDA Grew 7%
Upcoming AWS Coverage on Select Medical Holdings Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 8, 2017 / Active Wall St. announces its post-earnings coverage on Community Health Systems, Inc. (NYSE: CYH). The Company announced its fourth quarter and fiscal 2016 financial results on February 20, 2017. The Hospital operator surpassed top- and bottom-line expectations. Register with us now for your free membership at:
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One of Community Health Systems' competitors within the Hospitals space, Select Medical Holdings Corp. (NYSE: SEM), reported on February 23, 2017, results for its Q4 and year ended December 31, 2016. AWS will be initiating a research report on Select Medical in the coming days.
Today, AWS is promoting its earnings coverage on CYH; touching on SEM. Get our free coverage by signing up to:
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Earnings Reviewed
Community Health's net operating revenues for the three months ended December 31, 2016, totaled $4.47 billion, down 6.9% compared with $4.80 billion for the same period in 2015. The Company's revenue topped analysts' consensus of $4.42 billion. Community Health's net operating revenues for the year ended December 31, 2016, totaled $18.44 billion, down 5.1% compared with $19.44 billion for the same period in 2015.
Loss from continuing operations attributable to Community Health Systems, Inc.'s common stockholders increased to a loss of $(211) million, or $(1.91) per share (diluted), for Q4 2016,, compared with a loss from continuing operations of $(74) million, or $(0.66) per share (diluted), for Q4 2015. The reported quarter included the loss of $(2.35) per share (diluted) related to impairment and (gain) loss on sale of businesses, and loss of $(0.03) per share (diluted) related to government and other legal settlements and related legal expenses, and loss of $(0.02) per share (diluted) related to expenses from the spin-off of QHC.
Net loss attributable to Community Health Systems, Inc.'s common stockholders was $(220) million, or $(1.99) per diluted share, for Q4 2016 compared with $(83) million, or $(0.73) per diluted share, for Q4 2015. Earnings, adjusted for non-recurring costs and to account for discontinued operations, came in at $0.46 per share, exceeding Wall Street's expectations of $0.12 per share.
Community Health's adjusted EBITDA for Q4 2016 was $564 million compared with $527 million for Q4 2016, representing a 7.0% increase. The Company's adjusted EBITDA totaled $2.23 billion for FY16, down 16.7% compared with $2.67 billion for FY15.
Community Health's consolidated operating results for Q4 2016 reflect an 11.6% drop in total admissions, and a 12.7% decline in total adjusted admissions, compared with the same period in 2015. On a same-store basis, both admissions and adjusted admissions decreased 1.4% for the reported quarter on a y-o-y basis. On a same-store basis, net operating revenues increased 0.5% during Q4 2016 compared with the same period in 2015. Community Health's consolidated operating results for FY16 reflected an 8.8% decrease in total admissions on a y-o-y basis. On a same-store basis, the Company's admissions decreased 1.9% for the reported year.
Net income attributable to Community Health Systems, Inc.'s common stockholders was a loss of $(1.721) billion, or $(15.54) per share (diluted), for FY16 compared with income of $158 million, or $1.37 per share (diluted), for FY15.
Quarter in Detail
During Q4 2016, Community Health's inpatient admissions declined 1.4%. In the reported quarter, lower respiratory and flu-related adjusted admissions drove 60 basis points of its 1.4% adjusted admissions decline. The Company's former HMA facilities experienced a 2.3% decrease in admissions compared to 0.9% decline at the CHS legacy facilities, a 2% decrease in adjusted admissions, compared to a 1% decrease in legacy. It is worth noting that we are seeing growth in some of our HMA hospitals. Community Health's net outpatient revenue before provisions for bad debts represents 56% of its revenue.
During Q4 2016, the Company's managed care revenue increased 60 basis points from the year ago same period; Medicare increased 70; Medicaid decreased to 90; and self-paid decreased 40 basis points compared to the year ago corresponding period. Consolidated payer mix for the full year 2016 managed care was up 100 basis points. For FY16, consolidated charity plus self-pay discounts, plus bad debt expense, increased from 25% to 26.5% of adjusted net revenue, a 150 basis point increase.
Cash Flow
For Q4 2016, Community Health's cash flow from operations was $327 million compared with $306 million for the same period in 2015, representing a 6.9% growth. As of December 31, 2016, the Company's total assets were $21.9 billion, while cash and cash equivalent totaled $238 million. Community Health has repaid a substantial portion of its debts through divestitures. As of December 31, 2016, the Company had long-term debt of $14.79 billion, down 10.8% on a y-o-y basis.
Divestiture of Alabama Hospital
On March 04th, 2017, Community Health announced that subsidiaries of the Company have signed a definitive agreement to sell 125-bed Stringfellow Memorial Hospital in Anniston, Alabama, to The Health Care Authority of the City of Anniston. The purchase price of $25 million includes assumption of the approximately $13 million facility lease. The transaction is expected to close in Q2 2017, subject to customary regulatory approvals and closing conditions, as well as a financing contingency. This transaction was one of the ones discussed on the Company's earnings call.
Stock Performance
At the closing bell, on Tuesday, March 07, 2017, Community Health Systems' stock declined 9.33%, ending the trading session at $8.94. A total volume of 5.85 million shares were traded at the end of the day, which was higher than the 3-month average volume of 3.87 million shares. In the last month and previous three months, shares of the Company have rallied 35.25% and 63.44%, respectively. Moreover, the stock soared 59.93% since the start of the year. At Tuesday's closing price, the stock's net capitalization stands at $991.50 million.
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