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Community Health's (CYH) Q4 Loss Narrower Than Expected

Zacks Equity Research

Community Health Systems, Inc. CYH reported adjusted loss of 25 cents per share in the fourth quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 36 cents. However, adjusted loss incurred compares unfavorably with adjusted earnings of 46 cents in the year-ago quarter on lower revenues.

Net loss attributable to common stockholders was $17.98 per share in the fourth quarter, wider than net loss of $1.99 incurred in the year-ago period.

In the quarter under review, net operating revenues of $3,059 million missed the Zacks Consensus Estimate by 13% and decreased 31.6% year over year. The top line was adversely affected by a $591-million increase in contractual allowances and provision for bad debts.

Full-Year Update

For 2017, the company reported adjusted net loss of $1.20 per share against earnings of 46 cents in 2016.

Net operating revenues for 2017 totaled $15,353 million, down 16.7% year over year.

Quarterly Operational Update

The fourth quarter witnessed a 19.2% decrease in total admissions and a 19.3% fall in total adjusted admissions year over year.

In the reported quarter, total operating expenses rose 18.5% to $5.2 billion, primarily due to higher impairment and loss on sale of businesses.

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

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


Financial Update

As of Dec 31, 2017, the company’s total assets declined 20% from year-end 2016 to $17.4 billion. Cash and cash equivalents increased 136% to $563 million from year-end 2016.

The company paid off a substantial portion of its debt through divestitures. It had long-term debt of $13.9 billion as of Dec 31, 2017, down 6% year over year.

Cash flow from operations was $156 million for the fourth quarter, down 52% year over year.

2018 Guidance

Loss from continuing operations per share is expected to lie within $1.50-$1.10.

Community Health expects net operating revenues in the range of $13.6-$13.9 billion.

The company projects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for 2018 in the range of $1,550-$1,650 million.

Weighted-average diluted shares are expected in the band of 113-114 million.

Zacks Rank and Performance of Other Insurers

Community Health carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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