A month has gone by since the last earnings report for Community Health Systems (CYH). Shares have added about 2.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Community Health Systems due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Community Health Q4 Loss Wider Than Expected, Down Y/Y
Community Health System incurred adjusted loss of 42 cents per share in fourth-quarter 2018, wider than the Zacks Consensus Estimate of a loss of 58 cents and also the year-ago loss of 25 cents. This downside was mainly due to lower admissions in the reported quarter, partly offset by a decrease in expenses.
Quarterly Operational Update
In the quarter under review, net operating revenues were $3.45 billion, surpassing the Zacks Consensus Estimate by 1.9%. However, the top line improved 12.9% year over year owing to an increase in occupancy rates and the average length of stay.
The fourth quarter witnessed a decline of 9.7% in total admissions and a 9.8% fall in adjusted admissions when compared with the year-ago period.
Total operating costs and expenses were $3.6 billion, down 31.5% year over year owing to lower salaries and benefits plus supplies, rent and amortization.
The company incurred operating loss of $1.94 per share, comparing unfavorably with the loss of $1.20 suffered last year. However, the reported loss was lower than the company’s estimated range of a loss of $2.10$2.25.
Total revenues of $14.2 billion were down 7.8% year over year due to lower patient volumes.
Total assets at fourth-quarter quarter end were $15.9 billion, down 9% from the year-end 2017-level.
Cash and cash equivalents plunged 65% to $196 million from the figure as of 2017 end.
The company utilized $165 million in cash from operations compared with the cash generated of $156 in the year-ago quarter.
The company has a long-term debt of $13.4 billion as of Dec 31, 2018, dipping 3.6% from the number as of Dec 31, 2017.
Loss from continuing operations per share is now estimated between $1.60 and $1.25 while revenues are projected between $12.8 billion and $13.1 billion. Adjusted EBITDA is predicted in the range of $1.625-$1.725 billion while adjusted admission is likely to inch up 0-1%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -8.22% due to these changes.
At this time, Community Health Systems has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Community Health Systems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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