Franklin, Tenn.-based Community Health Systems reported an operating income of $146 million (5.3% margin) in the third quarter, down from a $243 million operating gain (7.9% margin) in the same quarter last year, according to financial results published Oct. 29.
After accounting for interest and income tax expenses, the 59-hospital, for-profit system posted a net loss of $86 million (-3.1% margin) in the third quarter, down from a $130 million net gain (4.2% margin) in the same period in 2025.
Hospital divestitures, an unfavorable payer mix and higher medical specialist costs weighed on the health system’ financial results.
“We are pleased to make continued progress on our strategic initiatives around quality outcomes, patient satisfaction, physician experience, and employee satisfaction and remain confident these investments will lead to improved financial performance,” CHS CEO Kevin Hammons said in a news release. “While volume trends and cash flow improved sequentially in the third quarter, payor mix and acuity did not develop as expected due to the challenging macro environment, negatively impacting financial results for the third quarter and our expectations for the remainder of the year.”
CHS reported $2.8 billion in net operating revenue for the quarter ended Sept. 30, down 11% from $3.1 billion during the same period in 2025, according to an Oct. 28 earnings release. Adjusted EBITDA fell 25.5% year over year to $280 million from $376 million.
The revenue decline largely reflects CHS’ ongoing hospital divestitures. On a same-store basis, revenue increased 3.8% year over year, admissions rose 2.2% and adjusted admissions increased 3.6%.
Operating cash flow increased to $155 million from $70 million in the prior-year period.
CHS attributed the year-over-year decline in adjusted EBITDA primarily to divestitures, unfavorable payer mix, lower nonpatient revenue and higher medical specialist fees and supplemental reimbursement program expenses. Increased volumes and reimbursement rates partially offset those pressures.
For the first nine months of 2026, CHS reported $8.55 billion in revenue, down 8.9% year over year, and a $74 million net loss, compared with $399 million in net income during the same period in 2025. Adjusted EBITDA declined to $918 million from $1.13 billion.
The company updated its full-year 2026 guidance to $11.3 billion to $11.5 billion in net operating revenue, $1.23 billion to $1.28 billion in adjusted EBITDA and a diluted net loss of $1.60 to $1.70 per share.
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