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Community Health (CYH) Incurs Lower Loss Than Expected in Q2

Zacks Equity Research
Community Health's (CYH) Q2 results suffer loss from decline in admissions.

Community Health Systems, Inc. CYH reported second-quarter loss of 1 cent per share, which was considerably better than the Zacks Consensus Estimate of a loss of 43 cents. In the year ago quarter, the company has incurred a loss of 31 cents per share. Earnings suffered from a decline in patient admissions.

Community Health Systems, Inc. Price and EPS Surprise

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

Quarterly Operational Update

In the reported quarter, net operating revenues were $3.56 billion, which surpassed the Zacks Consensus Estimate by 1.4% but decreased by 14% year over year, due to a decline in admissions.

Adjusted EBIDTA for the quarter was $411 million, down 5.5%.

The quarter witnessed a decrease of 2.1% in total admissions and 0.2% in adjusted admissions, when compared with the year-ago period, on a same store basis.

Total operating costs and expenses were $3.53 billion, 12.5% higher year over year, led by loss and impairment on sale of businesses. Also, the prior-year quarter had gained from electronic health records incentive reimbursement.

Update Financial

Total assets at quarter end were $1.6 billion, up 3.4% from the year-end 2017 level.

Cash and cash equivalents were $208 million, down 63% from year-end 2017.

Net cash provided by operating activities was $94 million, down from $503 million as of Jun 30, 2017.

The company had long-term debt of $13.7 billion as of Jun 30, 2018, down 1.5% from 2017-end level.

2018 Guidance Update

Loss from continuing operations per share is expected between $1.85 and $1.70.

Community Health estimates net operating revenues in the range of $13.9-$14.2 billion (compared with the previous 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 $1.60-$1.65 billion (versus $1.55-$1.65 billion projected earlier).

Zacks Rank and Performance of Peer Stocks

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 players in the healthcare industry that have reported second-quarter earnings so far, the bottom line at UnitedHealth Group Inc. UNH, HCA Healthcare, Inc. HCA and Universal Health Services, Inc. UHS beat estimates.

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