What happened

Revenue and income were down compared to year-ago figures, and one-time accounting charges even led the company into the red for its recently ended third quarter. But Community Health Systems (CYH) held up better than investors expected it to during the three-month stretch ending in September, driving the stock 23.5% higher as of 2:44 p.m. ET Thursday.

So what

Hospital operator Community Health reported revenue of just over $3 billion last quarter, down roughly 3% from last year's Q3 top line and falling just a bit short of expectations. The adjusted operating loss of $0.52 per share was also well shy of forecasts, reversing a profit of $0.69 per share for the same quarter a year earlier. But, investors are opting to see the glass as half full rather than half empty, tacitly expecting a greater impact from hurricane Ian, which ravaged Florida in September.

And there's good enough reason to celebrate these Q3 results. Although compared to a period in 2021 when COVID-19 hospitalizations were still strong, last quarter's per-hospital revenue and admissions were still relatively solid year over year, and up from the second quarter of this year. Costs are also being well contained. Notably, salaries and benefits -- the organization's single-biggest operating expense -- for the third quarter were essentially in line with year-ago levels, while spending on supplies fell on both an absolute and a relative basis.

Community Health Systems also reiterated its full-year guidance offered in July, implying hurricane Ian would make no lasting material impact on its business. The company is also still forecasting mid-single-digit revenue growth for the foreseeable future. This should put the hospital chain back into the black beginning next year.

Now what

But take today's big gains with an even bigger grain of salt.

While the company's third-quarter results were better than feared, they're still less than thrilling. And although the future looks a brighter, it isn't looking exactly brilliant. Much of Thursday's strength may merely be the result of the stock's 80% sell-off just since February, leaving it ripe for a rally on any seeming success. What's still missing here is clear evidence that Community Health Systems can meaningfully grow its top and bottom lines. Interested investors will want to pass for now and explore other opportunities.