Community Health's (CYH) Q4 Loss Narrower Than Expected

Community Health Systems, Inc. (NYSE:CYH) reported adjusted loss of 25 cents per share in the fourth quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 36 cents. However, adjusted loss incurred compares unfavorably with adjusted earnings of 46 cents in the year-ago quarter on lower revenues.

Net loss attributable to common stockholders was $17.98 per share in the fourth quarter, wider than net loss of $1.99 incurred in the year-ago period.

In the quarter under review, net operating revenues of $3,059 million missed the Zacks Consensus Estimate by 13% and decreased 31.6% year over year. The top line was adversely affected by a $591-million increase in contractual allowances and provision for bad debts.

Full-Year Update

For 2017, the company reported adjusted net loss of $1.20 per share against earnings of 46 cents in 2016.

Net operating revenues for 2017 totaled $15,353 million, down 16.7% year over year.

Quarterly Operational Update

The fourth quarter witnessed a 19.2% decrease in total admissions and a 19.3% fall in total adjusted admissions year over year.

In the reported quarter, total operating expenses rose 18.5% to $5.2 billion, primarily due to higher impairment and loss on sale of businesses.

Community Health Systems, Inc. Price, Consensus and EPS Surprise

Community Health Systems, Inc. Price, Consensus and EPS Surprise | Community Health Systems, Inc. Quote

Financial Update

As of Dec 31, 2017, the company’s total assets declined 20% from year-end 2016 to $17.4 billion. Cash and cash equivalents increased 136% to $563 million from year-end 2016.

The company paid off a substantial portion of its debt through divestitures. It had long-term debt of $13.9 billion as of Dec 31, 2017, down 6% year over year.

Cash flow from operations was $156 million for the fourth quarter, down 52% year over year.

2018 Guidance

Loss from continuing operations per share is expected to lie within $1.50-$1.10.

Community Health expects net operating revenues in the range of $13.6-$13.9 billion.

The company projects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for 2018 in the range of $1,550-$1,650 million.

Weighted-average diluted shares are expected in the band of 113-114 million.

Zacks Rank and Performance of Other Insurers

Community Health carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other firms in the medical sector that have reported fourth-quarter earnings so far, the bottom line of Centene Corp. (NYSE:CNC) , Anthem Inc (NYSE:ANTM) and UnitedHealth Group Inc. (NYSE:UNH) beat the respective Zacks Consensus Estimate.

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