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Community Health (CYH) Q1 Earnings Beat, Trims '22 EPS View

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Community Health Systems, Inc. (CYH - Free Report) reported first-quarter 2022 adjusted net income of 14 cents share, which outpaced the Zacks Consensus Estimate by 7.7% but declined 61.1% year over year.

Concurrent with first-quarter results, management trimmed its 2022 guidance for net income per share. The metric is expected between 75 cents and $1.30 per share, lower than the prior guidance of $1-$1.50 per share. The mid-point of the revised guidance indicates 58.2% plunge from the 2021 figure. These factors might have led to a decline of 4.9% in Community Health’s shares on Apr 28.

Nevertheless, the quarterly results of CYH were aided by higher revenues and uptick in adjusted admissions. However, increasing incidence of COVID-19 cases had adversely impacted the net operating revenues, labor expense and length of stay in the quarter under review.

Quarterly Operational Update

Net operating revenues amounted to $3.1 billion, which rose 3.3% year over year in the first quarter, driven by higher adjusted admissions. Yet, the top line missed the consensus mark by 1.6%.

Admissions slipped 1.7% year over year, while adjusted admissions grew 2.2% year over year in the quarter under review. On a same-store basis, admissions dipped 0.3% year over year but adjusted admissions improved 3.2% from the prior-year quarter’s reported figure.

Community Health had licensed beds of 13,289 as of Mar 31, 2022, which declined 2% year over year.

Adjusted EBITDA decreased 17.4% year over year to $409 million in the first quarter.

Total operating costs and expenses were $2.8 billion, which escalated 5.7% year over year primarily due to other operating expenses.

Meanwhile, CYH’s interest expense, net, decreased 6.1% year over year to $217 million.

Financial Update (as of Mar 31, 2022)

Community Health exited the first quarter with cash and cash equivalents of $460 million, down 9.3% from 2021-end figure.

Total assets inched up 0.3% from 2021-end to $15.3 billion.

Long-term debt amounted to $12.2 billion, which inched up 0.4% from the level at 2021 end.

Net cash provided by operating activities remained unchanged year over year level at $101 million in the first quarter.

2022 Outlook in Details

Concurrent with first-quarter results, Community Health altered its guidance for some metrics and the one for net income per share has already been mentioned above.

Adjusted EBITDA is projected within $1.775-$1.925 billion compared with the previous outlook of $1.825-$1.975 billion. The mid-point of the revised outlook suggests 6% decline from the 2021 figure.

Net cash provided by operating activities is anticipated to lie between $900 million and $1.05 billion for 2022, lower than the prior outlook of $950 million and $1.1 billion.

Meanwhile, the guidance for net operating revenues in the range of $12.6-$13.1 billion remains unchanged.

Capex is continued to be estimated within $500-$600 million. Labor costs are expected to remain high in the remaining part of the year.

Zacks Rank

Community Health currently has a Zacks Rank #5 (Strong 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 first-quarter results so far, the bottom line of Centene Corporation (CNC - Free Report) , Humana Inc. (HUM - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) beat the Zacks Consensus Estimate.

Centene reported first-quarter 2022 adjusted earnings per share of $1.83, which surpassed the Zacks Consensus Estimate by 8.9%. The bottom line improved 12.3% year over year. Total revenues of Centene rose 24% year over year to $37.2 billion in the first quarter. The top line beat the consensus mark by 7.2%. Managed care membership of CNC grew 8% year over year to 26.2 million as of Mar 31, 2022.

Humana reported first-quarter 2022 adjusted earnings per share of $8.04, which surpassed the Zacks Consensus Estimate of $6.83. The bottom line improved from the year-ago figure of $7.67 per share. Humana’s revenues of $23,970 million were up from $20,668 million in the prior-year quarter. The top line beat the Zacks Consensus Estimate of $23,550 million. While revenues from premiums and services increased 12.8% and 171.2% year over year, respectively, investment income declined 96.2% for HUM.

Molina Healthcare reported first-quarter 2022 adjusted earnings of $4.90 per share, beating the Zacks Consensus Estimate of $4.74. Further, the bottom line increased from the year-ago earnings of $4.44 per share. Total revenues of $7,770 million beat the consensus mark of $7,538 million. The top line surged from the year-ago level of $6,522 million. Premium revenues for MOH increased to $7,531 million from $6,306 million a year ago.