Market Overview

Community Health Systems's Earnings: A Preview


On Tuesday, October 27, Community Health Systems (NYSE: CYH) will release its latest earnings report. Here is Benzinga's outlook for the company.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Community Health Systems's per-share loss will be near $0.16 on sales of $2.90 billion, according to Wall Street analysts. Community Health Systems EPS in the same period a year ago totaled $0.29. Sales were $3.25 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to report earnings in line when it publishes results Tuesday, quarterly profit would be up 44.83%. Revenue would be down 10.66% from the year-ago period. Community Health Systems's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate -0.62 -0.58 -0.46 -0.59
EPS Actual 0.85 -1.59 0.40 -0.29
Revenue Estimate 2.65 B 3.17 B 3.18 B 3.14 B
Revenue Actual 2.52 B 3.02 B 3.29 B 3.25 B

Stock Performance

For a full 12 months, the return has risen by 3.93%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Community Health Systems is scheduled to hold the call at 11:00:00 ET and can be accessed here.


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Posted-In: Earnings