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Community Health Q3 Earnings Miss on Lower Adjusted Admissions
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Community Health Systems, Inc. (CYH - Free Report) reported a third-quarter 2024 adjusted loss of 30 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 16 cents. However, the bottom line improved from the prior-year loss of 33 cents per share.
Net operating revenues rose 0.1% year over year to $3.1 billion in the quarter under review. The top line beat the consensus mark by a whisker.
The quarterly earnings suffered from lower admissions, patient days, and higher salaries and benefits expenses. However, improved occupancy rates, reimbursement rates and lower contract labor and supplies expenses partially offset the negatives.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Community Health Systems, Inc. Price, Consensus and EPS Surprise
At the third-quarter end, the hospital count for Community Health was 69, lower than our estimate of 71.
Patient days tumbled 1.5% year over year and missed our estimate by 2.5%. The average length of stay increased year over year to 4.3 days, while the occupancy rate of 49.8% improved 270 basis points year over year.
Admissions fell 4.1% year over year. Adjusted admissions declined 3.7% year over year in the quarter under review. On a same-store basis, admissions and adjusted admissions improved 2.4% and 2.6%, respectively, from their corresponding prior-year quarter’s reported figures.
Licensed beds of CYH totaled 11,517 as of Sept. 30, 2024, which indicates a decrease of 977 beds from the prior-year quarter. The reported figure missed our estimate by 2.9%.
Total operating costs and expenses rose 13.1% year over year to $3.3 billion in the third quarter, higher than our estimate of $2.8 billion. Meanwhile, net interest expenses of $216 million increased 3.8% year over year. The metric came higher than our estimate of $211.1 million.
The company reported a net loss of $355 million in the third quarter compared with $52 million in the year-ago period. Adjusted EBITDA deteriorated 3.6% year over year to $347 million in the quarter under review primarily due to higher salaries and benefits expenses, costs for outsourced medical specialists, increased patient claim denials and losses from Hurricane Helene, partially offset by improved same-store volumes, higher net benefit of supplemental reimbursement programs, reimbursement rates and reduction in supplies and contract labor expense. The metric came below our estimate of $386 million.
Financial Update (as of Sept. 30, 2024)
Community Health exited the third quarter with cash and cash equivalents of $33 million, which increased from $38 million at 2023-end. Total assets of $13.9 billion decreased from $14.5 billion at 2023-end.
Long-term debt amounted to $11.5 billion, which increased from $11.47 billion at 2023-end. Current maturities of long-term debt were $20 million.
In the third quarter of 2024, CYH generated operating cash flows of $264 million, up from $120 million in the year-ago quarter.
2024 Outlook Revised
The company raised its net operating revenue guidance between $12.45 billion and $12.55 billion for 2024, the mid-point of which is flat from the 2023 figure of $12.5 billion.
Adjusted EBITDA is now estimated to be in the range of $1.5-$1.54 billion. The mid-point of the guidance implies a 4.6% rise from the 2023 figure of $1.453 billion.
Net loss per share is expected to be between 60 cents and 50 cents in 2024. Community Health reported a net loss of $1.39 per share in 2023.
Depreciation and amortization continue to be predicted in the range of $465-$480 million for 2024.
Net cash from operating activities is now estimated to be between $400 million and $500 million in 2024. Capital expenditures continue to be anticipated in the range of $350-$400 million. Diluted weighted-average shares outstanding continue to be estimated in the range of $132-133 million.
Of the Medical sector players that have reported third-quarter results so far, the bottom lines of UnitedHealth Group Incorporated (UNH - Free Report) , Abbott Laboratories (ABT - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter 2024 adjusted earnings per share (EPS) of $7.15, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line improved 9% year over year.
Revenues rose 9.1% year over year to $100.8 billion, attributable to a higher number of people served through the UnitedHealthcare and Optum businesses. The top line beat the consensus mark by 1.3%.
Abbott Laboratories reported third-quarter 2024 adjusted earnings per share (EPS) of $1.21, which beat the Zacks Consensus Estimate by 0.8%. The figure also improved 6.1% from the prior-year quarter’s level.
Worldwide sales of $10.64 billion were up 4.9% year over year on a reported basis. The top line beat the Zacks Consensus Estimate by 0.7%.
Molina Healthcare reported third-quarter 2024 adjusted EPS of $6.01, which beat the Zacks Consensus Estimate by 0.8%. Also, the bottom line grew 19% from the year-ago period.
Total revenues amounted to $10.3 billion, which improved 20.9% year over year. Also, the top line outpaced the consensus mark by 3.8%.
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Community Health Q3 Earnings Miss on Lower Adjusted Admissions
Community Health Systems, Inc. (CYH - Free Report) reported a third-quarter 2024 adjusted loss of 30 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 16 cents. However, the bottom line improved from the prior-year loss of 33 cents per share.
Net operating revenues rose 0.1% year over year to $3.1 billion in the quarter under review. The top line beat the consensus mark by a whisker.
The quarterly earnings suffered from lower admissions, patient days, and higher salaries and benefits expenses. However, improved occupancy rates, reimbursement rates and lower contract labor and supplies expenses partially offset the negatives.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Community Health Systems, Inc. Price, Consensus and EPS Surprise
Community Health Systems, Inc. price-consensus-eps-surprise-chart | Community Health Systems, Inc. Quote
Quarterly Operational Update
At the third-quarter end, the hospital count for Community Health was 69, lower than our estimate of 71.
Patient days tumbled 1.5% year over year and missed our estimate by 2.5%. The average length of stay increased year over year to 4.3 days, while the occupancy rate of 49.8% improved 270 basis points year over year.
Admissions fell 4.1% year over year. Adjusted admissions declined 3.7% year over year in the quarter under review. On a same-store basis, admissions and adjusted admissions improved 2.4% and 2.6%, respectively, from their corresponding prior-year quarter’s reported figures.
Licensed beds of CYH totaled 11,517 as of Sept. 30, 2024, which indicates a decrease of 977 beds from the prior-year quarter. The reported figure missed our estimate by 2.9%.
Total operating costs and expenses rose 13.1% year over year to $3.3 billion in the third quarter, higher than our estimate of $2.8 billion. Meanwhile, net interest expenses of $216 million increased 3.8% year over year. The metric came higher than our estimate of $211.1 million.
The company reported a net loss of $355 million in the third quarter compared with $52 million in the year-ago period. Adjusted EBITDA deteriorated 3.6% year over year to $347 million in the quarter under review primarily due to higher salaries and benefits expenses, costs for outsourced medical specialists, increased patient claim denials and losses from Hurricane Helene, partially offset by improved same-store volumes, higher net benefit of supplemental reimbursement programs, reimbursement rates and reduction in supplies and contract labor expense. The metric came below our estimate of $386 million.
Financial Update (as of Sept. 30, 2024)
Community Health exited the third quarter with cash and cash equivalents of $33 million, which increased from $38 million at 2023-end. Total assets of $13.9 billion decreased from $14.5 billion at 2023-end.
Long-term debt amounted to $11.5 billion, which increased from $11.47 billion at 2023-end. Current maturities of long-term debt were $20 million.
In the third quarter of 2024, CYH generated operating cash flows of $264 million, up from $120 million in the year-ago quarter.
2024 Outlook Revised
The company raised its net operating revenue guidance between $12.45 billion and $12.55 billion for 2024, the mid-point of which is flat from the 2023 figure of $12.5 billion.
Adjusted EBITDA is now estimated to be in the range of $1.5-$1.54 billion. The mid-point of the guidance implies a 4.6% rise from the 2023 figure of $1.453 billion.
Net loss per share is expected to be between 60 cents and 50 cents in 2024. Community Health reported a net loss of $1.39 per share in 2023.
Depreciation and amortization continue to be predicted in the range of $465-$480 million for 2024.
Net cash from operating activities is now estimated to be between $400 million and $500 million in 2024. Capital expenditures continue to be anticipated in the range of $350-$400 million. Diluted weighted-average shares outstanding continue to be estimated in the range of $132-133 million.
Zacks Rank
Community Health currently carries a Zacks Rank #3 (Hold). 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 third-quarter results so far, the bottom lines of UnitedHealth Group Incorporated (UNH - Free Report) , Abbott Laboratories (ABT - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported third-quarter 2024 adjusted earnings per share (EPS) of $7.15, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line improved 9% year over year.
Revenues rose 9.1% year over year to $100.8 billion, attributable to a higher number of people served through the UnitedHealthcare and Optum businesses. The top line beat the consensus mark by 1.3%.
Abbott Laboratories reported third-quarter 2024 adjusted earnings per share (EPS) of $1.21, which beat the Zacks Consensus Estimate by 0.8%. The figure also improved 6.1% from the prior-year quarter’s level.
Worldwide sales of $10.64 billion were up 4.9% year over year on a reported basis. The top line beat the Zacks Consensus Estimate by 0.7%.
Molina Healthcare reported third-quarter 2024 adjusted EPS of $6.01, which beat the Zacks Consensus Estimate by 0.8%. Also, the bottom line grew 19% from the year-ago period.
Total revenues amounted to $10.3 billion, which improved 20.9% year over year. Also, the top line outpaced the consensus mark by 3.8%.