Can Low Patient Days Affect Community Health (CYH) Q4 Earnings?
Community Health Systems, Inc. CYH is set to report its fourth-quarter 2023 results on Feb 20, after the closing bell.
Where Do the Estimates Stand?
The Zacks Consensus Estimate for fourth-quarter earnings per share of 3 cents suggests a 98% decline from the prior-year level of $1.50. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of nearly $3.2 billion indicates a 0.4% increase from the year-ago reported figure.
Community Health beat the consensus estimate for earnings in two of the prior four quarters and missed twice, with the average surprise being 22.1%. This is depicted in the graph below:
Community Health Systems, Inc. Price and EPS Surprise
Community Health Systems, Inc. price-eps-surprise | Community Health Systems, Inc. Quote
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at CYH’s previous-quarter performance first.
Q3 Earnings Rewind
In the last reported quarter, the hospital operator’s adjusted loss per share of 33 cents was wider than the Zacks Consensus Estimate of a loss of 16 cents. The quarterly results were affected by declining patient days, length of stay and licensed beds. Rising expenses also affected the results. However, better admissions partially offset the negatives.
Now, let’s see how things have shaped up before the fourth-quarter earnings announcement.
Q4 Factors to Note
Lower adjusted admissions and declining beds in services, patient days and occupancy rates are expected to have impacted Community Health’s fourth-quarter performance. Both the Zacks Consensus Estimate and our estimate for adjusted admissions indicate a 0.7% year-over-year decline.
The Zacks Consensus Estimate for beds in services indicates a 4.4% year-over-year decline, whereas our model estimate suggests a 6.7% decrease. Also, the Zacks Consensus Estimate, as well as our estimate for the number of hospitals, is pegged at 76, indicating a decline from the year-ago figure of 80.
Along with the reduction in hospital numbers, the occupancy rate is expected to have lowered in the quarter under review. Both the Zacks Consensus Estimate and our estimate for occupancy rate indicate a deterioration of 40 basis points to 49.6% in the fourth quarter.
The factors stated above are expected to have positioned the company for a year-over-year decline, making an earnings beat uncertain. Furthermore, the Zacks Consensus Estimate for patient days indicates a 7.4% year-over-year fall, whereas our model estimate suggests a nearly 8% decrease.
The negatives mentioned above are expected to have been partially offset by lower expenses. Our estimate for total operating expenses indicates a 1.1% year-over-year decline due to lower salaries and benefits costs, lease costs and rent and other operating expenses.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Community Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is +47.06%. This is because the Most Accurate Estimate is currently pegged at 5 cents per share, higher than the Zacks Consensus Estimate of 3 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: However, Community Health currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for Community Health, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Amedisys, Inc. AMED has an Earnings ESP of +2.02% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Amedisys’ bottom line for the to-be-reported quarter is pegged at $1.04 per share, which has remained stable over the past week. AMED beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 11.9%.
Globus Medical, Inc. GMED has an Earnings ESP of +5.68% and a Zacks Rank #3.
The Zacks Consensus Estimate for Globus Medical’s bottom line for the to-be-reported quarter is pegged at 59 cents per share, which has witnessed one upward revision over the past month against none in the opposite direction. GMED beat earnings estimates in each of the past four quarters, with an average surprise of 5.4%.
Codexis, Inc. CDXS has an Earnings ESP of +81.25% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Codexis’ earnings per share for the to-be-reported quarter indicates a 15.8% year-over-year improvement. CDXS beat earnings estimates in three of the past four quarters and missed once, with the average surprise being 9.5%.
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Amedisys, Inc. (AMED) : Free Stock Analysis Report
Community Health Systems, Inc. (CYH) : Free Stock Analysis Report
Codexis, Inc. (CDXS) : Free Stock Analysis Report
Globus Medical, Inc. (GMED) : Free Stock Analysis Report
