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Community Health (CYH) Down 10.9% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Community Health Systems, Inc. (CYH - Free Report) . Shares have lost about 10.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 drivers.
Community Health Systems (CYH - Free Report) Q4 Earnings Beat Estimates
Community Health Systems reported adjusted earnings of $0.46 per share in the fourth quarter of 2016, which crushed the Zacks Consensus Estimate by 283%. The company had incurred a loss of $0.28 per share in the year-ago quarter.
For the full year, the company reported adjusted earnings of 46 cents per share that plunged 80% year over year, primarily due to lower revenues.
Quarterly Operational Update:
For the fourth quarter, net operating revenue of $4.47 billion surpassed the Zacks Consensus Estimate by 1.4% but decreased 68% year over year. For 2016, revenues came in at $18.48 billion, down 5.13% year over year.
Total admissions of 203.5 billion fell 11.7%, while adjusted admissions of 440.6 billion declined 12.7%, both on a year-over-year basis. On a same-store basis, both admissions and adjusted admissions dipped 1.4% during the fourth quarter.
In the reported quarter, net inpatient revenue accounted for 43.6% of total patient revenue, up 60 basis points (bps) from the year-ago quarter. On the other hand, net outpatient revenue accounted for 56.4% of total patient revenue, down 60 bps year over year.
Financial Update:
As of Dec 31, 2016, the company’s total assets declined 18% year over year to $21.9 billion. Cash and cash equivalent grew 29.3% year over year to $238 million.
The company paid off a substantial portion of its debts through divestures. It now has a long-term debt of $14.8 billion as of Dec 31, 2016, down 10.8% year over year.
Total shareholders’ equity was $1.73 billion as of Dec 31, 2016, down from $4.1 billion at 2015 end.
Cash flow from operations was $327 million at the end of the fourth quarter, up 7% year over year from $306 million.
2017 Guidance
Community Health projects adjusted EBITDA for 2017 in the range of $2–$2.175 billion.
Capital expenditure is expected the band of $625–$775 million.
The company expects operating cash flow in the range of $1.050–$1.225 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower. In the past month, the consensus estimate has shifted lower by 48.4% due to these changes.
Community Health Systems, Inc. Price and Consensus
At this time, Community Health.'s stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Community Health (CYH) Down 10.9% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Community Health Systems, Inc. (CYH - Free Report) . Shares have lost about 10.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 drivers.
Community Health Systems (CYH - Free Report) Q4 Earnings Beat Estimates
Community Health Systems reported adjusted earnings of $0.46 per share in the fourth quarter of 2016, which crushed the Zacks Consensus Estimate by 283%. The company had incurred a loss of $0.28 per share in the year-ago quarter.
For the full year, the company reported adjusted earnings of 46 cents per share that plunged 80% year over year, primarily due to lower revenues.
Quarterly Operational Update:
For the fourth quarter, net operating revenue of $4.47 billion surpassed the Zacks Consensus Estimate by 1.4% but decreased 68% year over year. For 2016, revenues came in at $18.48 billion, down 5.13% year over year.
Total admissions of 203.5 billion fell 11.7%, while adjusted admissions of 440.6 billion declined 12.7%, both on a year-over-year basis. On a same-store basis, both admissions and adjusted admissions dipped 1.4% during the fourth quarter.
In the reported quarter, net inpatient revenue accounted for 43.6% of total patient revenue, up 60 basis points (bps) from the year-ago quarter. On the other hand, net outpatient revenue accounted for 56.4% of total patient revenue, down 60 bps year over year.
Financial Update:
As of Dec 31, 2016, the company’s total assets declined 18% year over year to $21.9 billion. Cash and cash equivalent grew 29.3% year over year to $238 million.
The company paid off a substantial portion of its debts through divestures. It now has a long-term debt of $14.8 billion as of Dec 31, 2016, down 10.8% year over year.
Total shareholders’ equity was $1.73 billion as of Dec 31, 2016, down from $4.1 billion at 2015 end.
Cash flow from operations was $327 million at the end of the fourth quarter, up 7% year over year from $306 million.
2017 Guidance
Community Health projects adjusted EBITDA for 2017 in the range of $2–$2.175 billion.
Capital expenditure is expected the band of $625–$775 million.
The company expects operating cash flow in the range of $1.050–$1.225 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower. In the past month, the consensus estimate has shifted lower by 48.4% due to these changes.
Community Health Systems, Inc. Price and Consensus
Community Health Systems, Inc. Price and Consensus | Community Health Systems, Inc. Quote
VGM Scores
At this time, Community Health.'s stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.