Community Health Systems more than quadruples net loss to shareholders

Community Health Systems more than quadrupled its net loss to shareholders in the first quarter of 2019.

The Franklin, Tenn.-based hospital chain reported Tuesday its net loss attributable to shareholders was $118 million in the three months ended March 31, compared with a $25 million net loss in the prior-year period.

For-profit CHS’ adjusted earnings before interest, taxes, depreciation and amortization dropped by 11.1% in the first quarter of 2019 to $391 million, compared with $440 million in the prior-year period.

CHS reported $3.38 billion in net operating revenue in the quarter, compared with $3.69 billion in the prior-year period. While down 8.5% year-over-year, the company’s revenue came out ahead of an estimate from Zacks Investment Research, which predicted $3.31 billion in first quarter revenue. CHS’ expenses declined 8.3% in the first quarter year-over-year.

The loss attributable to CHS’ stockholders worked out to $1.04 per share, exceeding Zacks’ loss estimate of $0.44 per share.

CHS’ same-store admissions were basically flat—down 0.1%—in the first quarter year-over-year, and adjusted admissions increased 0.8%.

CHS divested seven hospitals in the first quarter of 2019, a factor that throws consolidated admissions figures out of whack. On a consolidated basis, total admissions declined 13.4% in the quarter.

CHS said it will continue to sell hospitals throughout this year. The system fell far short of its 2018 divestiture goals.

The divestitures are part of an effort to bring down CHS’ heavy debt load, which only dropped by $7 million year-over-year and ended the first quarter of 2019 at about $13.4 billion.

CHS CEO Wayne Smith said in a statement that the company saw incremental improvement in same-store net revenue and volume across key markets. Recent investments in physician recruitment and developing new access points will continue that trend, he said.

“We remain focused on all aspects of operational excellence, with a high priority on the efficient use of our resources, diligent efforts to continuously improve processes and results, and consistent execution of our growth initiatives,” Smith said.

Smith’s total compensation grew by 42% last year to $7 million, driven mostly by quadrupled cash incentive pay because the company hit revenue and earnings targets. That’s despite the fact that CHS’ stock price fell 34% over the year to $2.82 per share on Dec. 31, 2018.

https://www.modernhealthcare.com/providers/chs-more-quadruples-net-loss-shareholders