What happened
Shares of Community Health Systems (CYH 2.37%), one of the nation's largest owners of hospitals, fell more than 40% Tuesday morning after the company reported first-quarter earnings. The stock is down more than 16% so far this year.
So what
The healthcare company, which operates 78 acute-care hospitals in 15 states, reported first-quarter revenue of $3.1 billion, flat sequentially and year over year. It also said it had a net loss of $51 million, or $0.40 in earnings per share (EPS) loss, compared to a loss of $1 million or $0.01 in EPS loss in the same period a year ago. A quarter ago, the company had net income of $446 million and EPS of $3.18. The company's net cash plummeted to $5 million in the first quarter, compared to $101 million in the first quarter a year ago.
Now what
The hope for a turnaround dimmed a bit with the earnings report as the company's finances took a step backward. Now that pandemic relief funds from the federal government have stopped, the company's net income has worsened considerably. Still, the reaction to the report seems a bit overdone, considering revenue is essentially unchanged from a year or a quarter ago. It's also important to note that the company's guidance for 2023 was unchanged. The company said then that it expects yearly revenue of between between $12.2 billion and $12.6 billion, an increase of 1.5% over 2022 at the midpoint. Community Health also said it expected a yearly EPS loss between $0.65 and $0.05, compared to a $1.38 in EPS loss last year.
