Community Health Systems
shares sank Thursday after the hospital operator posted a loss for its second quarter and said it now expects a loss for the year.
Community Health (ticker: CYH) reported a loss of $2.52 a share for the second quarter ended June 30 after the market closed Wednesday. Analysts polled by FactSet expected earnings of 5 cents a share. Quarterly revenue of $2.93 billion came in below estimates of $3.14 billion. Adjusted Ebitda, or earnings before interest, taxes, depreciation, and amortization, were $253 million, below consensus of $413 million.
The company now expects a loss of $1.65 to $2.55 per share for the full year. Community Health previously guided for earnings between 75 cents to $1.30 per share for 2022.
“Our results in the second quarter were affected by challenging operating dynamics that included lower than anticipated volume, lower net revenue per adjusted admission, and significant contract labor costs driven by labor market and inflationary pressures,” Chief Executive Tim Hingtgen said.
Shares for Community Health sank 36% Thursday to $3.30. The stock has fallen 75% this year.
Lower hospital admissions drove the weak results, UBS analyst Andrew Mok wrote in a research note Wednesday.
RBC Capital Markets analyst Ben Hendrix wrote in a research note Wednesday that the results reflected “significant strain” on the company. He cited factors such as lower volume and weaker rates, as well as labor costs and inflation as pressures for the company.
But Hendrix noted that, even though labor presented the largest hurdle, he was encouraged to see those costs “at least moving in the right direction.”
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