Community Health Systems, Inc. CYH reported a fourth-quarter 2024 adjusted loss of 42 cents per share, which missed the Zacks Consensus Estimate of a profit of 5 cents. Also, the bottom line deteriorated from the prior-year loss of 41 cents per share.
Net operating revenues rose 2.6% year over year to $3.27 billion in the quarter under review. The top line beat the consensus mark by 3.3%.
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The quarterly earnings suffered from lower admissions, patient days and occupancy rate. However, increased same-store volumes, favorable changes in the payor mix and lower expenses for contract laborpartially offset the negatives.
Community Health Systems, Inc. Price, Consensus and EPS Surprise
Community Health Systems, Inc. Price, Consensus and EPS Surprise
Community Health Systems, Inc. price-consensus-eps-surprise-chart | Community Health Systems, Inc. Quote
CYH’s Full-Year 2024 Results
Its revenues of $12.63 billion increased from $12.49 billion a year ago. Adjusted loss of $1.03 per share improved from $1.39 in the previous year. Full-year adjusted EBITDA of $1.54 billion increased from $1.45 billion a year ago. Total operating expense of $12.09 billion rose from the 2023 level of $11.53 billion.
CYH’s Q4 Operational Update
At the fourth-quarter end, the hospital count for Community Health was 76, lower than the year-ago level of 78.
Patient days tumbled 11% year over year and missed our model estimate by a whisker. The average length of stay decreased 4.4% year over year to 4.3 days, while the occupancy rate of 50.5% declined from 53.5% in the year-ago quarter.
Adjusted admissions declined 5.7% year over year in the quarter under review. On a same-store basis, adjusted admissions improved 3.1% from the corresponding prior-year quarter’s reported figure.
Licensed beds of CYH totaled 11,403 as of Dec. 31, 2024, which indicates a decrease of 4.2% from the prior-year quarter. However, the reported figure beat our estimate by 4.6%.
Total operating expenses rose 4.6% year over year to $3 billion in the fourth quarter due to higher other operating expenses and were higher than our estimate of $2.9 billion. Meanwhile, net interest expenses of $218 million increased 4.3% year over year. The metric came higher than our estimate of $212.1 million.
The company reported a net loss of $28 million in the fourth quarter compared with an income of $85 million in the year-ago period. Adjusted EBITDA improved 10.9% year over year to $428 million in the quarter under review, primarily due to increased same-store volumes, reimbursement rates, favorable changes in payor mix and lower expense for contract labor. The positives were partially offset by a reduction in acuity and non-patient revenue, higher patient claim denials and costs for outsourced medical specialists. The metric came above our estimate of $400.5 million.
Financial Update (as of Dec. 31, 2024)
Community Health exited the fourth quarter with cash and cash equivalents of $37 million, which decreased from $38 million at 2023 end. Total assets of $14.1 billion decreased from $14.5 billion at 2023-end.
Long-term debt amounted to $11.43 billion, which decreased from $11.47 billion at 2023 end. Current maturities of long-term debt were $20 million.
In 2024, CYH generated operating cash flows of $480 million, up from $210 million in the year-ago period.
CYH’s 2025 Outlook
The company expects net operating revenue between $12.2 billion and $12.6 billion for 2025 compared with the 2024 figure of $12.63 billion. Adjusted EBITDA is estimated to be in the range of $1.45-$1.60 billion compared with the 2024 level of $1.54 billion.
Net loss per share is expected to be between 55 cents and breakeven in 2025.
Depreciation and amortization is predicted in the range of $425-$445 million for 2025.
Net cash from operating activities is estimated to be between $600 million and $700 million in 2025. Capital expenditures are anticipated in the range of $350-$400 million. This Zacks Rank #2 (Buy) company expects weighted-average shares outstanding to be $134 million for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Did Other Healthcare Stocks Perform?
Here are some stocks in the broader Medical space that have also reported earnings for the December quarter: HCA Healthcare, Inc. HCA, The Ensign Group, Inc. ENSG and The Cigna Group CI.
HCA Healthcare reported fourth-quarter 2024 adjusted EPS of $6.22, which outpaced the Zacks Consensus Estimate by 4.2%, driven byhigher patient volumes giving rise to an increased number of inpatient surgeries and same-facility emergency room visits. However, the upside was partly offset by elevated salaries and benefits expenses. Additional expenses due to Hurricane Helene and Hurricane Milton also impacted the results.
Ensign reported fourth-quarter 2024 adjusted earnings per share of $1.49, which outpaced the Zacks Consensus Estimate by 1.4% thanks to improved occupancy rates, higher patient days and higher skilled service revenues. The positives were partly offset by an elevated expense level due to the higher cost of services and rents.
Cigna reported fourth-quarter 2024 adjusted earnings per share of $6.64, which missed the Zacks Consensus Estimate by 15.2% due to a decline in its overall medical customer base and elevated medical costs. Nevertheless, the downside was partly offset by expanding specialty volumes in the Evernorth Health Services segment and new client wins.
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