Community Health Systems, Inc. ( CYH Quick Quote CYH - Free Report) is set to report its fourth-quarter 2022 results on Feb 15, after the closing bell.
In the last reported quarter, the hospital operator’s adjusted net loss of 52 cents per share missed the Zacks Consensus Estimate of earnings of 5 cents, due to lower admissions, patient days, occupancy rate and higher operating costs. Hurricane Ian in Florida also negatively impacted its results.
Let’s see how things have shaped up prior to the
fourth-quarter earnings announcement. The Trend in Estimate Revision
The Zacks Consensus Estimate for fourth-quarter earnings per share of 41 cents suggests a 64.4% decrease from the prior-year figure of $1.15. It witnessed no movement in the past week. Community Health beat the consensus estimate for earnings in two of the prior four quarters and missed on the other two occasions. This is depicted in the graph below:
The consensus estimate for fourth-quarter revenues of $3.2 billion indicates a 1.9% decrease from the year-ago reported figure.
Factors to Note
Higher adjusted admissions are expected to have aided Community Health’s fourth-quarter performance. Both the Zacks Consensus Estimate and our estimate for adjusted admissions indicate 4.2% year-over-year growth.
The positives of increased adjusted admissions are expected to have been offset by lower beds in services, patient days and occupancy rate. Also, increased costs are likely to have reduced margins in the fourth quarter. Both the Zacks Consensus Estimate and our estimate for beds in services indicate a 2.8% year-over-year decline.
The Zacks Consensus Estimate, as well as our estimate for the number of hospitals, are pegged at 81, indicating a decline from the year-ago figure of 83. Despite the reduction in hospital numbers, the occupancy rate is expected to have lowered in the quarter under review. The consensus mark for occupancy rate indicates a deterioration of 248 basis points to 49.02% in the fourth quarter.
The factors stated above are expected to have positioned the company for a year-over-year decline. Furthermore, both the Zacks Consensus Estimate and our estimate for patient days indicate a 6.9% year-over-year fall.
Our estimate for total operating expenses indicates 5.7% year-over-year growth due to higher salaries and benefits costs, making an earnings beat uncertain.
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 0.00%. This is because the Most Accurate Estimate is currently pegged at 41 cents per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter. Zacks Rank: Community Health currently carries a Zacks Rank #5 (Strong 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: Alkermes plc ( ALKS Quick Quote ALKS - Free Report) has an Earnings ESP of +49.57% and a Zacks Rank #2. You can see . the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for Alkermes’ bottom line for the to-be-reported quarter has improved 50% in the past 30 days. ALKS beat earnings estimates in three of the past four quarters and met once, with an average surprise of 306.7%.
BeiGene, Ltd. ( BGNE Quick Quote BGNE - Free Report) has an Earnings ESP of +4.19% and a Zacks Rank #2.
The Zacks Consensus Estimate for BeiGene’s bottom line for the to-be-reported quarter indicates a 31.5% year-over-year improvement. The consensus mark for BGNE’s revenues is pegged at $400.6 million, indicating 87.2% year-over-year growth.
Alector, Inc. ( ALEC Quick Quote ALEC - Free Report) has an Earnings ESP of +21.74% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Alector’s bottom line for the to-be-reported quarter indicates a 20.6% year-over-year improvement. ALEC witnessed one upward estimate revision in the past 30 days, against none in the opposite direction.
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