Here's Why Community Health Systems' Stock Plummeted 20% On Tuesday

by Jayson Derrick

February 16, 2016 9:02 AM | 2 min read | Make a Comment

Shares of

Community Health Systems

CYH

were trading lower by more than 20 percent ahead of Tuesday's opening bell after the company reported its

fourth quarter results on Monday. Community Health said on Monday that it lost $0.28 per share in the fourth quarter on revenue of $4.80 billion. Wall Street analysts were expecting the company to earn $0.95 per share on revenue of $4.99 billion. Net loss for the quarter totaled $0.73 per share - marking a noticeable drop from the $0.87 per share Community Health earned in the same quarter a year ago. The company added that total hospital admissions fell 3.6 percent in the quarter from a year ago and fell and fell 1.5 percent in total adjusted admissions. On a same-store basis, admissions decreased 3.4 percent and adjusted admissions decreased 1.2 percent. Commenting on the results, Wayne T. Smith, chairman and chief executive officer of Community Health Systems, Inc., said, "The results for the fourth quarter of 2015 were affected by a number of factors, including volume weakness compared with a strong fourth quarter a year ago when we experienced higher emergency room visits and admissions attributed to respiratory illness and the flu. It is taking longer than expected to achieve operational improvements in some of the former HMA markets; however, we continue to see opportunities in these markets and remain convinced that performance will improve over time. Finally, certain adjustments during the quarter negatively affected our financial results, including primarily the increase in our allowance for doubtful accounts, as well as the impairment of long-lived assets, legal fees and settlement expenses, and costs from the planned spin-off. Despite these challenges, we believe our physician recruitment initiatives, clinical and operational strategies, and rigorous expense management will drive sustainable improvements in 2016."

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Posted In: Earnings News Community Health flu Health Companies Health stocks Hospital Admissions Wayne Smith

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