Community Health (CYH) Stock Down 1.7% Since Q3 Earnings Release
Community Health Systems, Inc. CYH shares lost 1.7% since it reported third-quarter 2023 results on Oct 25. The quarterly results were affected by declining patient days, length of stay and licensed beds year over year. Rising expenses also affected the results. However, better admissions partially offset the negatives.
CYH reported third-quarter 2023 adjusted loss of 33 cents per share, wider than the Zacks Consensus Estimate of a loss of 16 cents. However, the bottom line improved by 36.5%.
Net operating revenues rose 2% year over year to $3,086 million in the quarter under review. The top line beat the consensus mark by 1.7%.
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 third-quarter end, the hospital count for Community Health was 76, missing our estimate by 2.6%.
Patient days tumbled 7.5% year over year. The average length of stay fell 6.5% year over year, while the occupancy rate of 46.8% improved 10 basis points year over year.
Admissions grew 0.5% year over year. Meanwhile, adjusted admissions also advanced 0.4% year over year in the quarter under review. On a same-store basis, admissions and adjusted admissions improved 3.7% and 4.2%, respectively, from their corresponding prior-year quarter’s reported figures.
Licensed beds of CYH totaled 12,494 as of Sep 30, 2023, which indicates a decrease of 815 beds from the prior-year quarter. The reported figure missed our estimate by 3%.
Total operating costs and expenses increased 3.3% year over year to $2,913 million in the third quarter, higher than our estimate of $2,827.2 million. Meanwhile, net interest expenses of $208 million declined 4.1% year over year. The metric came higher than our estimate of $200.6 million.
Net loss of $52 million in the third quarter deteriorated from a break even in the year-ago period.Adjusted EBITDA declined 10% year over year to $360 million in the quarter under review primarily due to changes in payor mix, high costs of supplemental reimbursement programs partially offset by improved inpatient volumes and lower contract labor costs. The metric beat our estimate by 7.6%.
Financial Update (as of Sep 30, 2023)
Community Health exited the third quarter with cash and cash equivalents of $91 million, which declined from $118 million at 2022-end. Total assets of $14,674 million increased from $14,669 million at 2022-end.
Long-term debt amounted to $11,820 million, which increased from $11,614 million at 2022-end. Current maturities of long-term debt were $22 million.
In the first nine months of 2023, CYH generated operating cash flows of $120 million, down from $291 million year over year.
2023 View Revised
The company expects net operating revenues between $12,400 million and $12,500 million for 2023, the mid-point of which indicates a rise of 2% from the 2022 reported figure of $12,211 million.
Adjusted EBITDA is estimated to be in the range of $1,450-$1,500 million. The mid-point of the guidance implies a 0.6% rise from the 2022 figure of $1,466 million.
Net loss per share is expected to be between $1 and 90 cents in 2023. Community Health reported a net loss of $1.38 per share in 2022.
Depreciation and amortization are predicted to be 4.2% of net operating revenues in 2023.
Net cash from operating activities is anticipated to be between $400 million and $450 million in 2023. Capital expenditures are expected to be in the range of $450-$500 million. Diluted weighted-average shares outstanding are estimated to be in the range of $130-131 million.
Zacks Rank
Community Health currently carries a Zacks Rank #4 (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 third-quarter 2023 results so far, the bottom-line results of Acadia Healthcare Company, Inc. ACHC, Centene Corporation CNC and HCA Healthcare, Inc. HCA beat the Zacks Consensus Estimate.
Acadia Healthcare reported third-quarter 2023 adjusted earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line improved 9.5% year over year. Total revenues amounted to $731.3 million, which advanced 12.2% year over year in the quarter under review. The top line outpaced the consensus mark by 3.4%.
Total U.S. same-facility revenues of ACHC rose 11.4% year over year to $721.3 million in the third quarter. The growth came on the back of a 6.1% improvement in revenue per patient day and 4.9% growth in patient days. Admissions increased 4.3% year over year. Adjusted EBITDA of $174.5 million advanced 10.9% year over year.
Centene reported third-quarter 2023 adjusted EPS of $2.10, which beat the Zacks Consensus Estimate by 2.4%. The bottom line advanced 18.6% year over year. Revenues of CNC amounted to $37,608 million, which improved 4.6% year over year. The top line outpaced the consensus mark by 3.4%.
Premiums improved 7% year over year to $33,713 million, beating our estimate by 3.3%. The total membership of CNC came in at 28.4 million as of Jun 30, 2023, which increased 7.5% year over year. It reported adjusted net earnings of $1,155 million in the quarter under review, which increased 10.8% year over year.
HCA Healthcare reported third-quarter 2023 adjusted EPS of $4.29, which surpassed the Zacks Consensus Estimate by 0.2%. Also, the bottom line climbed 1.9% year over year. HCA’s revenues advanced 7% year over year to $15.9 billion.
The top line beat the consensus mark by 1.8%. While same-facility equivalent admissions rose 3.7% year over year in the third quarter, same-facility admissions improved 2.2% year over year. Same-facility revenue per equivalent admission rose 2.4% year over year in the quarter under review. Adjusted EBITDA of $3.1 billion grew 0.5% year over year in the third quarter.
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
Community Health Systems, Inc. (CYH) : Free Stock Analysis Report
HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
Centene Corporation (CNC) : Free Stock Analysis Report
Acadia Healthcare Company, Inc. (ACHC) : Free Stock Analysis Report
