Revenues fell by almost 6% but the company made significant progress on addressing its net loss.
One year after posting a $325 million net loss, Community Health Systems (CHS) reported a $17 million loss in Q3, according to its latest earnings report released Tuesday afternoon.
The Franklin, Tennessee-based for-profit hospital operator saw revenues decline nearly 6% to $3.2 billion, while its adjusted EBITDA reached $388 million, a $16 million improvement year-over-year.
CHS released its earnings report one day after the company announced the sale of three Virginia hospitals to Bon Secours Mercy Health, Inc., a deal which is expected to close by the end of the year.
While admissions took a step back during the quarter, sliding 9.2% while adjusted admissions fell 8.4%, the company's income from operations totaled $184 million, an increase of 148.6% year-over-year.
"We delivered a strong same-store performance across key metrics during the third quarter," Wayne T. Smith, chairman and CEO of CHS, said in a statement. "Continued execution of our transfer program, Accountable Care Organizations, capital investments, and strategic plans have driven these improved results. 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' stock reacted positively to the earnings report, trading up more than 4% in the after-hours session.
Despite a strong start to 2019, net cash provided by operating activities fell drastically in Q3, tumbling by 121.4% year-over-year.
Not all developments in Q3 were positive for CHS, as the company was the subject of a shareholder lawsuit filed in August which accused company leadership of misleading investors at the end of 2017.
ADDITIONAL CHS Q3 EARNINGS REPORT HIGHLIGHTS:
- CHS decreased its projections for year-end capital expenditures, placing it in a range between $425 million to $475 million.
- On a same-store basis net operating revenues increased 4.3% year-over-year.
- The provider's net cash used in financing activities was a loss of $127 million, marking an improvement on its loss of $418 million in Q3 2018.
For complete financial information, review CHS' filing with the Securities and Exchange Commission.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.