Community Health (CYH) Q4 Earnings Miss, Revenues Up Y/Y
Community Health Systems, Inc. CYH reported fourth-quarter 2023 adjusted loss of 41 cents per share, lagging the Zacks Consensus Estimate of a profit of 3 cents. The bottom line also declined from the prior year's earnings of $1.5 per share.
Net operating revenues rose 1.2% year over year to $3.2 billion in the quarter under review. The top line beat the consensus mark of $3.15 billion.
The quarterly results benefited from a rise in admissions, lower expenses and increased patient demand. Declining patient days, length of stay and licensed beds more than offset the positives.
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
At the fourth-quarter end, the hospital count for Community Health was 71, missing our estimate by 6.6%.
Patient days tumbled 0.5% year over year but beat our estimate by 8.2%. The average length of stay fell 2.2% year over year, while the occupancy rate of 53.5% improved 350 basis points year over year.
Admissions grew 0.7% year over year. Meanwhile, adjusted admissions also advanced 1.9% year over year in the quarter under review. On a same-store basis, admissions and adjusted admissions improved 1.9% and 3.6%, respectively, from their corresponding prior-year quarter’s reported figures.
Licensed beds of CYH totaled 11,902 as of Dec 31, 2023, which indicates a decrease of 930 beds from the prior-year quarter. The reported figure missed our estimate by 3.5%.
Total operating costs and expenses declined 2.1% year over year to $2.85 billion in the fourth quarter, lower than our estimate of $2.88 billion. Meanwhile, net interest expenses of $209 million increased 2% year over year. The metric came higher than our estimate of $203.9 million.
The company reported a net loss of $133 million in the fourth quarter against a profit of $46 million in the year-ago period. Adjusted EBITDA declined 4.5% year over year to $386 million in the quarter under review primarily due to changes inpayor mix, high costs of supplemental reimbursement programs partially offset by improved inpatient volumes and lower contract labor costs. The metric missed our estimate of $405 million.
Financial Update (as of Dec 31, 2023)
Community Health exited the fourth quarter with cash and cash equivalents of $38 million, which declined from $118 million at 2022-end. Total assets of $14.5 billion decreased from $14.7 billion at 2022-end.
Long-term debt amounted to $11.5 billion, which decreased from $11.6 billion at 2022-end. Current maturities of long-term debt were $21 million.
In 2023, CYH generated operating cash flows of $210 million, down from $300 million year over year.
2024 Outlook
The company expects net operating revenues between $12.3 billion and $12.7 billion for 2024, the mid-point of which indicates no change from the 2023 figure of $12.5 billion.
Adjusted EBITDA is estimated to be in the range of $1.475-$1.625 billion. The mid-point of the guidance implies a 6.7% rise from the 2023 figure of $1.453 billion.
Net loss per share is expected to be between 65 cents and 5 cents in 2024.Community Health reported a net loss of $1.39 per share in 2023.
Depreciation and amortization are predicted to be in the range of $490-$510 million for 2024.
Net cash from operating activities is anticipated to be between $500 million and $650 million in 2024. Capital expenditures are expected to be in the range of $350-$400 million. Diluted weighted-average shares outstanding are estimated to be in the range of $132-133 million.
Zacks Rank
Community Health currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported fourth-quarter 2023 results so far, the bottom-line results of Integer Holdings Corporation ITGR, Amgen Inc. AMGN and Molina Healthcare, Inc. MOH beat the respective Zacks Consensus Estimate.
Integer Holdings delivered adjusted earnings per share (EPS) of $1.39 in the fourth quarter of 2023, which improved 25.2% year over year. The figure topped the Zacks Consensus Estimate by 3.7%. It registered revenues of $413.2 million in the fourth quarter, up 10.9% year over year. The figure surpassed the consensus estimate by 0.3%. Organically, revenues increased 9.5%.
The Medical Sales segment reported revenues of $404.1 million, up 13.3% year over year on a reported basis and 11.9% on an organic basis. Revenues in the Non-Medical segment totaled $9.1 million, down 41.9% year over year both on a reported and organic basis. ITGR’s operating income totaled $43.5 million, reflecting an 18% uptick from the year-ago quarter. Operating margin in the fourth quarter expanded 60 bps to 10.5%.
Amgen’s fourth-quarter 2023 adjusted EPS of $4.71 beat the Zacks Consensus Estimate of $4.66. Earnings rose 15% year over year. Total revenues of $8.2 billion marginally beat the consensus estimate of $8.16 billion. Total revenues rose 20% year over year. Total product revenues increased 20% from the year-ago quarter to $7.83 billion (U.S.: $5.87 billion; ex-U.S.: $1.969 billion). Prolia revenues were $1.1 billion, up 12% from the year-ago quarter.
Evenity recorded sales of $318 million in the quarter, up 41% year over year. Xgeva delivered revenues of $527 million, up 9% year over year, driven by higher net selling prices. Adjusted operating margin of AMGN rose 0.8 percentage points to 46.7% in the quarter.
Molina Healthcare reported fourth-quarter 2023 adjusted EPS of $4.38, which outpaced the Zacks Consensus Estimate by 1.6%. The bottom line advanced 6.8% year over year. Total revenues rose 10% year over year to $9 billion in the quarter under review. Also, the top line surpassed the consensus mark by 9%.
Premium revenues amounted to $8.4 billion, which grew 5.6% year over year in the fourth quarter. Investment income of $114 million rose nearly one-fold year over year. MOH reported an adjusted net income of $255 million, which advanced 6.3% year over year. The consolidated medical care ratio deteriorated 80 bps year over year to 89.1%. Total membership was around 5 million as of Dec 31, 2023, which declined 5% year over year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
Community Health Systems, Inc. (CYH) : Free Stock Analysis Report
Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
