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Community Health (CYH) Down 30.3% Since Q2 Earnings Report

·4 min read

Community Health Systems, Inc. CYH shares declined 30.3% since it reported weak second-quarter results on Jul 27, 2022. Furthermore, its adjusted EBITDA projection indicates a significant year-over-year decline.

Community Health reported a second-quarter 2022 adjusted net loss of $2.52 per share, which missed the Zacks Consensus Estimate of a loss of a penny and significantly deteriorated from the year-ago profit of 23 cents.

Net operating revenues amounted to $2,934 million, which declined 2.4% year over year in the second quarter. The top line also missed the consensus mark by 6.6%.

The weak second-quarter results were caused by lower admissions, patient days and higher operating costs.

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

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

Community Health Systems, Inc. price-consensus-eps-surprise-chart | Community Health Systems, Inc. Quote

Quarterly Operational Update

The number of hospitals at the second-quarter end was at $84 million. Patient days declined 3.7% year over year in the second quarter.

Admissions slipped 3.4% year over year, while adjusted admissions fell 0.4% year over year in the quarter under review. On a same-store basis, admissions dipped 3.5% year over year and adjusted admissions fell 0.5% from the prior-year quarter’s reported figure.

Community Health had licensed beds of 13,341 as of Jun 30, 2022, which increased from $13,320 million.

Adjusted EBITDA decreased 44.2% year over year to $253 million in the second quarter. Income from operations declined 62.1% year over year to $119 million.

Total operating costs and expenses were $2,815 million, which escalated from $2,693 million. Salaries and benefits and other operating expenses increased in the second quarter while the cost of supplies declined. Meanwhile, CYH’s interest expense, net, decreased marginally to $218 million from $219 million a year ago.

Financial Update (as of Jun 30, 2022)

Community Health exited the second quarter with cash and cash equivalents of $346 million, down from the 2021-end figure of $507 million. Total assets at the second-quarter end were at $15,058 million, down from $15,217 million at 2021-end.

Long-term debt amounted to $12,183 million, which inched up from the $12,109 million level at 2021-end. Current maturities of long-term debt were at $32 million.

Net cash provided by operating activities was at $53 million in the second quarter of 2022, down from $179 million in the year-ago period.

2022 Outlook in Details

Adjusted EBITDA is projected within $1,300-$1,400 million. The mid-point of the revised outlook suggests a decline from $1,969 million in 2021. Net operating revenues are expected in the range of $12,200-$12,500 million compared with the year-ago level of $12,368 million. For the medium-term (4 years), net revenue growth is expected in the mid-single digit.

Net cash provided by operating activities is anticipated to lie between $500 million and $600 million for 2022, lower than the prior outlook of $900 million and $1.1 billion. Last year, CYH reported net cash used in operations of $131 million.

Capex is now expected within $400-$450 million, down from the previous estimate range of $500-$600 million. Net loss per share is estimated at $2.55-$1.65 for 2022.

Zacks Rank & Key Picks

Community Health currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the broader medicalspace are Molina Healthcare, Inc. MOH, Elevance Health Inc. ELV and Agenus Inc. AGEN, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Molina Healthcare’s 2022 bottom line indicates a 29.6% increase from the prior-year reported number. MOH beat earnings estimates in each of the past four quarters, with the average being 3.2%.

The Zacks Consensus Estimate for Elevance’s 2022 bottom line indicates 10.4% year-over-year growth. ELV beat earnings estimates in each of the past four quarters, with the average being 4.3%.

The Zacks Consensus Estimate for Agenus’ 2023 bottom line indicates a 28.1% year-over-year improvement. AGEN beat earnings estimates twice in the past four quarters and missed on the other two occasions.


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