Will Patient Volumes Aid Community Health's (CYH) Q3 Earnings?
Community Health Systems, Inc. CYH is scheduled to release third-quarter 2023 results on Oct 25, after market close.
Q3 Estimates
The Zacks Consensus Estimate for Community Health’s third-quarter loss per share is pegged at 15 cents, narrower than the prior-year quarter’s loss of 52 cents per share.
The consensus mark for revenues is $3,042 million, suggesting 0.6% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Community Health’s bottom line beat estimates in two of the trailing four quarters and missed the mark twice, the average negative surprise being 236.37%. This is depicted in the chart below:
Community Health Systems, Inc. Price and EPS Surprise
Community Health Systems, Inc. price-eps-surprise | Community Health Systems, Inc. Quote
Let’s see how things have shaped up prior to the third-quarter earnings announcement.
Expanding patient volumes, better payer mix and improved revenue per adjusted admission are likely to have boosted revenue growth in the third quarter.
We expect Community Health’s admissions to inch up 0.1% year over year in the to-be-reported quarter. Revenue per adjusted admission is expected to increase 0.2% year over year in the third quarter.
Additionally, higher number of surgeries across an array of specialties, such as cardiovascular, colorectal, urology and gynecology, is likely to have provided an opportunity to CYH to earn greater revenues. Expansion initiatives in the form of bed addition and opening of ambulatory surgery centers and freestanding emergency departments are expected to have enabled it to gain a greater market share and subsequently, are likely to have aided the quarterly results.
However, the upside is likely to have been partly offset by a decline in patient days, fall in the average length of stay and a lower occupancy rate. We expect patient days to decrease 7.4% year over year in the third quarter. Our estimate for occupancy rate is 45.4%, which indicates a deterioration of 130 basis points from the prior-year quarter’s reported number.
Community Health’s margins are likely to have taken a hit from an escalating operating expense level in the to-be-reported quarter. We expect total operating costs and expenses to be $2,827.2 million, up 0.2% year over year.
What Our Quantitative Model Predicts
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 odds of an earnings beat. However, that’s not the case here as elaborated below.
Earnings ESP: Community Health has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: CYH currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for Community Health, here are some companies from the Medical space, which according to our model, have the right combination of elements to beat on earnings this time around:
DENTSPLY SIRONA Inc. XRAY has an Earnings ESP of +1.85% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for XRAY’s third-quarter 2023 earnings is pegged at 48 cents per share, indicating an improvement of 17.1% from the year-ago quarter’s reported figure.
DENTSPLY SIRONA’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 12.51%.
DexCom, Inc. DXCM has an Earnings ESP of +7.39% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for DXCM’s third-quarter 2023 earnings is pegged at 34 cents per share, which implies a rise of 21.4% from the year-ago quarter’s reported figure.
DexCom’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 28.83%.
Merck & Co., Inc. MRK has an Earnings ESP of +1.73% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for MRK’s third-quarter 2023 earnings is pegged at $1.94 per share, suggesting 4.9% growth from the year-ago quarter’s reported number.
Merck's earnings beat estimates in each of the trailing four quarters, the average surprise being 6.05%.
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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
DexCom, Inc. (DXCM) : Free Stock Analysis Report
Community Health Systems, Inc. (CYH) : Free Stock Analysis Report
