CHS slashes net loss by $308M, plans to sell more hospitals

Franklin, Tenn.-based Community Health Systems, which operates 102 hospitals in 18 states, narrowed its net loss in the third quarter of 2019.

CHS reported a decline in revenues and admissions in the third quarter of this year. The company said admissions decreased 9.2 percent year over year and operating revenues dropped 5.9 percent to $3.2 billion. However, admissions were up 2.4 percent in the third quarter of 2019 on a same-facility basis.

After factoring in operating expenses and one-time charges, CHS ended the third quarter of 2019 with a net loss attributable to stockholders of $17 million. That's compared to the third quarter of 2018, when the company recorded a net loss of $325 million.

Looking at results for the first nine months of 2019, CHS reported a net loss of $302 million on revenues of $9.9 billion. The company recorded a net loss of $460 million on revenues of $10.7 billion in the first three quarters of 2018.

CHS Chairman and CEO Wayne T. Smith said he expects the company's performance to continue to improve in the fourth quarter and next year.

"We delivered a strong same-store performance across key metrics during the third quarter. Continued execution of our transfer program, accountable care organizations, capital investments, and strategic plans have driven these improved results," he said in the earnings release. "We believe these investments, along with recent divestitures and ongoing operating efficiency initiatives, have positioned the company for continued improved performance. As we move forward, we expect a good finish to this year and believe we are well-positioned to deliver a strong performance in 2020."

CHS announced in late 2017 that it intends to sell a group of hospitals with combined revenue of $2 billion, and the company has made progress toward that goal this year. As of Oct. 1, CHS had completed the divestiture of 12 hospitals this year. The company has three other hospitals under definitive agreement to sell.

"The company intends to continue its portfolio rationalization strategy during the remainder of 2019 and is pursuing additional interests for sale transactions, which are currently in various stages of negotiation with potential buyers," states the earnings release.

The hospital divestitures have helped CHS reduce its debt load. The company carried $13.88 billion in long-term debt when it announced its divestiture plan at the end of 2017. CHS' long-term debt totaled $13.29 billion as of Sept. 30.

Shares of CHS closed Oct. 29 at $4.58 per share, down from $4.60 the day prior.

More articles on healthcare finance:

West Virginia hospital files for bankruptcy, owes CHS $651K
Illinois hospital begins 'final wind down processes'
UHS' profit sinks to $97M in Q3

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