Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Community Health Systems despite lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The earnings report is expected on April 23, 2025, with a consensus EPS estimate of a loss of $0.10 per share, reflecting a year-over-year change of +28.6% [3]. - Revenues are projected to be $3.11 billion, down 0.8% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 4% higher in the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, leading to a negative Earnings ESP of -4.17% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation from consensus estimates, with positive readings being more predictive of earnings beats [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have shown a nearly 70% success rate in delivering positive surprises [8]. Historical Performance - Community Health Systems has only beaten consensus EPS estimates once in the last four quarters, with a significant miss of -940% in the last reported quarter [12][13]. Conclusion - Community Health Systems does not appear to be a strong candidate for an earnings beat, and investors should consider other factors before making investment decisions [16].

Core Viewpoint - Community Health Systems, Inc. (CYH) is positioned for growth due to improving same-store volumes, favorable payor mix changes, and reduced contract labor expenses, with strategic improvements and divestitures expected to unlock shareholder value [1] CYH's Tailwinds - Adjusted admissions on a same-store basis improved by 3.1% year over year in the last reported quarter, contributing to a 10.9% year-over-year increase in adjusted EBITDA to $428 million [2] - The company's occupancy rate has been increasing over the last two years, driven by a growing senior population and rising disease cases, which is expected to continue [2] - Revenue per adjusted admission is growing significantly, supporting top-line growth, while divestitures of non-core assets, such as the recent sale of ShorePoint Health for $260 million, are optimizing the hospital portfolio and improving margins [3] - A partnership with Denim Health to integrate conversational AI technology into the Patient Access Center is streamlining agent workload, potentially leading to cost savings, while decreasing contract labor expenses is also expected to reduce losses [4] - Community Health anticipates adjusted EBITDA to be between $1.45 billion and $1.60 billion in 2025, with net cash from operating activities projected to be between $600 million and $700 million this year [5] CYH's Headwinds - Declining patient days and average length of stay are significant challenges, with patient days dropping by 4.6% year over year in 2023 and 5.3% in 2024, and average length of stay falling by 4.3% in 2023 and 2.2% in 2024 [6] - The company expects a net loss per share to be between 55 cents and breakeven in 2025 [6] - As of December 31, 2024, CYH had cash and cash equivalents of $37 million against long-term debt of $11.4 billion, resulting in a net debt to EBITDA ratio of 9.11X, significantly higher than the industry average of 3.29X [7] - Net interest expense increased by 3.6% in 2024 to $860 million [7] CYH's Earnings Surprise History - Community Health's earnings have only outpaced the Zacks Consensus Estimate in one of the last four quarters, with three misses and an average surprise of negative 263.9% [8]

Group 1 - Community Health Systems, Inc. (CYH) completed the sale of ShorePoint Health – Port Charlotte and related assets to AdventHealth for $260 million, aligning with its strategy to optimize its hospital portfolio and focus on core markets [1][2] - The sale is expected to provide additional capital for debt reduction, reinvestment, or operational improvements, indicating a shift towards streamlining operations and enhancing profitability [3] - As of December 31, 2024, CYH had cash and cash equivalents of $37 million and long-term debt of $11.4 billion, highlighting the need for effective capital reallocation from asset sales [3][4] Group 2 - CYH reported an adjusted loss of $1.03 per share in 2024, with expectations of losses between 55 cents and breakeven in 2025, prompting investor interest in the company's capital management strategies [4] - The company’s shares have increased by 19% over the past year, contrasting with a 4.9% decline in the industry, indicating a relatively strong performance [6]

Core Insights - AdventHealth has acquired ShorePoint Health Port Charlotte, a 254-bed full-service hospital, expanding its network of care in Florida [1][3] - The hospital will be rebranded as AdventHealth Port Charlotte, integrating over 1,300 new team members and more than 80 providers into the AdventHealth organization [1][2] - The acquisition includes related businesses such as physician clinic operations and outpatient services, enhancing AdventHealth's service offerings in the region [3][5] Company Strategy - AdventHealth aims to deliver whole-person care, emphasizing the integration of physical, mental, and spiritual health in its services [2][8] - The organization is committed to assessing community needs in Punta Gorda, particularly after the previous hospital's closure due to hurricane damage [4][5] - Leadership changes include the appointment of Adam Johnson as president/CEO for AdventHealth Port Charlotte, who has a background in operational improvements and capital projects [5][6][7] Community Impact - The acquisition is positioned as a partnership with the local community to provide exceptional care and address regional health needs [2][5] - AdventHealth's mission is to extend the healing ministry of Christ, which will guide its operations in the newly acquired facility [7][8] - The organization emphasizes a smooth transition for team members and providers, ensuring continuity of high-quality care for patients [7]

Financial Data and Key Metrics Changes - Same-store net operating revenues for the year increased by 5.5% and adjusted EBITDA improved by 6% for 2024 [12][26] - Adjusted EBITDA for the fourth quarter was $428 million, compared to $386 million in the prior year period, with a margin of 13.1%, up from 12.1% [26] - Cash flows from operations were $216 million for the fourth quarter, up from $90 million in the fourth quarter of 2023, and $480 million for the full year of 2024, up from $210 million in 2023 [32] Business Line Data and Key Metrics Changes - Same-store adjusted admissions increased by 2.7% and same-store surgeries increased by 1.3% for the full year 2024 [8] - Same-store ASC cases increased by 14% last year, reflecting strong growth in outpatient surgery [11] - Medical specialist fees increased approximately 12% year-over-year to $170 million in the fourth quarter, totaling $640 million for the full year, up 10.9% [29] Market Data and Key Metrics Changes - Same-store revenue growth in the fourth quarter was up 6.5%, driven by a 3.4% increase in inpatient admissions and a 3.1% growth in adjusted admissions [25] - The company completed divestitures in Cleveland, Tennessee, and North Carolina, with additional divestitures expected to generate over $1 billion in total proceeds [13][34] Company Strategy and Development Direction - The company is focused on expanding outpatient access, including primary care, specialty practices, and urgent care centers, with significant capital investments [9] - The implementation of the new ERP system is expected to drive efficiencies and reduce costs, with estimated savings of $40 million to $60 million in 2025 [35][36] - The company anticipates further pressure in medical specialist fees in 2025, but expects to manage costs effectively through in-sourcing initiatives [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted that payer downgrades and denials have stabilized since the third quarter, but remain a concern [14][27] - The company expects net revenue of $12.2 billion to $12.6 billion and adjusted EBITDA of $1.450 billion to $1.6 billion for 2025, excluding unapproved directed payment program reimbursements [37] - Management expressed confidence in the sustainability of Medicaid supplemental programs, emphasizing their importance for maintaining service levels [69][70] Other Important Information - The company completed the implementation of its new ERP system, which is expected to enhance operational efficiency [35] - The company plans to finalize divestitures in the first quarter of 2025, which are expected to provide nearly $550 million in gross proceeds [33] Q&A Session Summary Question: Guidance for 2025 and bridging from 2024 - Management provided a high-level bridge for EBITDA, indicating a reduction of approximately $100 million due to divestitures and DPP funds, offset by organic growth of $75 million to $100 million [42][43] Question: Strategic moves and divestitures - Management highlighted ongoing investments in core portfolio growth and indicated that there are still opportunities for organic growth through expansions and new projects [46][49] Question: DPP program expectations - Management clarified that the New Mexico DPP program exceeded expectations due to timing and approval processes, and they remain optimistic about future approvals [64][66] Question: Organic growth metrics - Management expects 2% to 3% volume growth in 2025, with mid-single-digit net revenue growth contributing to margin improvements [74][75] Question: Cash flow drivers - Management noted that improved cash flow in 2025 will be driven by the recognition of DPP funds and tax refunds, despite higher cash interest payments [90][91]

Company Overview - Community Health Systems, Inc. operates 76 affiliated hospitals with over 11,000 beds and more than 1,000 care sites across 39 markets in 15 states[11]. - The company employs approximately 1,900 physicians and 1,200 licensed healthcare practitioners, enhancing service delivery and patient care[11]. - Community Health Systems aims to strengthen regional networks, currently operating 46 hospitals in 12 unique regional networks[18]. Financial Performance - Net operating revenues for 2024 were $12,634 million, up from $12,490 million in 2023, reflecting a growth of 1.2%[50]. - Adjusted EBITDA for 2024 was $1,540 million, representing 12.2% of net operating revenues, compared to $1,453 million or 11.6% in 2023[50]. - Net cash flows provided by operating activities increased to $480 million in 2024, up from $210 million in 2023, representing 3.8% of net operating revenues[50]. - For the year ended December 31, 2024, the net loss attributable to Community Health Systems, Inc. stockholders was $516 million, compared to a loss of $133 million in 2023 and a profit of $46 million in 2022[54]. - The company has a significant amount of indebtedness, with outstanding borrowings of $341 million under the ABL Facility and approximately $491 million of additional borrowing capacity as of December 31, 2024[163]. - The current high interest rate environment has adversely impacted the company and could increase debt service obligations significantly[172]. Market Trends - National healthcare expenditures grew 7.5% in 2023 to over $4.8 trillion, accounting for approximately 17.6% of the U.S. GDP[39]. - CMS projects total U.S. healthcare spending to exceed $7.7 trillion by 2032, growing at an average annual rate of 5.4%[39]. - Hospital care expenditures totaled over $1.5 trillion in 2023, an increase of 10.4% compared to 2022, with a projected growth rate of 5.4% annually from 2025 to 2032, reaching over $2.3 trillion by 2032[40]. - The population aged 65 or older is expected to increase from 59 million in 2024 to 71 million by 2030, representing 20.6% of the total U.S. population, which will drive demand for healthcare services[43]. Regulatory Environment - The company faces regulatory uncertainties that may affect its operations and reimbursement arrangements due to potential changes in government policies[66]. - The company is subject to various federal and state regulations, including the Anti-Kickback Statute and Stark Law, which impose strict compliance requirements on financial arrangements with healthcare providers[71]. - The Office of Inspector General (OIG) has identified potential violations related to financial relationships with physicians, including incentive arrangements that could lead to increased scrutiny[74]. - The company must comply with the Emergency Medical Treatment and Active Labor Act (EMTALA), which mandates care for emergency medical conditions regardless of payment ability, with penalties for non-compliance[87]. Operational Challenges - The company faces competition from municipal and not-for-profit hospitals, which may have advantages in funding and service offerings[128]. - Increased labor costs have been experienced due to challenges in recruiting and retaining nurses and other medical support personnel[138]. - The company faces potential default risks on its indebtedness if it fails to generate sufficient cash flow or comply with covenants, which could lead to bankruptcy or liquidation[173]. - Recent macroeconomic conditions in the United States, including significant inflation and elevated interest rates, have adversely impacted the company's financial results and may continue to do so[174]. Strategic Initiatives - The company focuses on expanding patient access through investments in primary care, emergency medicine, and outpatient services, targeting significant growth in these areas[20]. - The company has implemented a centralized clinical recruiting function, resulting in increased clinical position hires and decreased time-to-fill for key patient care roles[137]. - The company is pursuing strategies to enhance competitiveness, including improving outpatient services and engaging skilled clinical personnel, but faces challenges from increasing competition and consolidation in the healthcare industry[188]. Revenue Sources - Medicare revenue represented 18.1% of net operating revenues in 2024, down from 19.9% in 2023 and 20.9% in 2022[56]. - Managed Care and other third-party payors accounted for 48.1% of net operating revenues in 2024, slightly up from 47.9% in 2023[56]. - In the year ended December 31, 2024, 32.9% of the company's net operating revenues came from Medicare and Medicaid programs[192]. - 65.8% of the company's net operating revenues were derived from commercial payors during the same period[194]. Compliance and Legal Risks - The company faces risks related to legal proceedings and regulatory compliance, which could result in substantial liabilities[162]. - The company is actively entering new financial arrangements with healthcare providers while striving to comply with applicable fraud and abuse laws[82]. - Increased scrutiny from law enforcement authorities on healthcare provider arrangements may impact the company's operational strategies and compliance efforts[80]. Workforce and Diversity - The company employs approximately 60,000 employees, including around 15,000 part-time employees, as of December 31, 2024[136]. - Approximately 80% of the company's employees are women, and about 31% are people of color, reflecting a commitment to workforce diversity[143]. - The company offers approximately 13,600 training courses through its Advanced Learning Center platform, ensuring continuous education for employees[144].

Core Viewpoint - Community Health Systems, Inc. (CYH) reported a fourth-quarter adjusted loss of 42 cents per share, missing the consensus estimate of a profit of 5 cents, and showing a deterioration from the prior year's loss of 41 cents per share [1][2] Financial Performance - Net operating revenues increased by 2.6% year over year to $3.27 billion in the fourth quarter, surpassing the consensus mark by 3.3% [1] - For the full year 2024, revenues reached $12.63 billion, up from $12.49 billion in 2023, with an adjusted loss of $1.03 per share improving from $1.39 the previous year [3] - Adjusted EBITDA for the full year was $1.54 billion, an increase from $1.45 billion in the prior year [3] Operational Metrics - The hospital count decreased to 76 from 78 year over year, while patient days fell by 11% [4] - Adjusted admissions declined by 5.7% year over year, although same-store adjusted admissions improved by 3.1% [5] - The average length of stay decreased by 4.4% to 4.3 days, and the occupancy rate dropped to 50.5% from 53.5% in the prior year [4] Expenses and Losses - Total operating expenses rose by 4.6% year over year to $3 billion in the fourth quarter, exceeding estimates [6] - Net interest expenses increased by 4.3% year over year to $218 million, also higher than estimates [6] - The company reported a net loss of $28 million in the fourth quarter, compared to a profit of $85 million in the same period last year [7] Cash Flow and Debt - As of December 31, 2024, cash and cash equivalents were $37 million, down from $38 million at the end of 2023 [8] - Total assets decreased to $14.1 billion from $14.5 billion, while long-term debt slightly decreased to $11.43 billion [8] - Operating cash flows for 2024 were $480 million, up from $210 million in the previous year [8] 2025 Outlook - The company expects net operating revenue for 2025 to be between $12.2 billion and $12.6 billion, with adjusted EBITDA estimated between $1.45 billion and $1.60 billion [10] - Net loss per share is projected to be between 55 cents and breakeven for 2025 [10] - Estimated net cash from operating activities for 2025 is between $600 million and $700 million, with capital expenditures anticipated to be between $350 million and $400 million [11]

Community Health Systems (CYH) Q4 2024 Earnings Call February 19, 2025 11:00 AM ET Company Participants Anton Hie - VP Investor RelationsTim Hingtgen - CEOKevin Hammons - President & CFOBen Hendrix - Equity Research - Healthcare Services and Managed CareA.J. Rice - Managing DirectorAndrew Mok - DirectorJoshua Raskin - Partner - Managed Care & Providers Conference Call Participants Brian Tanquilut - Equity Research Analyst - Healthcare ServicesNone - Analyst Operator Good day, and welcome to the Community He ...

Financial Performance - Net operating revenues for Q4 2024 totaled $3.265 billion, a 2.6% increase from $3.181 billion in Q4 2023[4] - Net loss attributable to Community Health Systems, Inc. stockholders was $(70) million, or $(0.53) per share (diluted), compared to net income of $46 million, or $0.35 per share (diluted) in Q4 2023[5] - Adjusted EBITDA for Q4 2024 was $428 million, up from $386 million in Q4 2023, reflecting a growth of 10.9%[7] - For the year ended December 31, 2024, net operating revenues were $12.634 billion, a 1.2% increase from $12.490 billion in 2023[9] - The net loss attributable to Community Health Systems, Inc. stockholders for the year was $(516) million, or $(3.90) per share (diluted), compared to $(133) million, or $(1.02) per share (diluted) in 2023[10] - Adjusted EBITDA for the year ended December 31, 2024, was $1.540 billion, an increase of 6% from $1.453 billion in 2023[11] - Total net operating revenues for 2024 were $12,634 million, a 1.2% increase from $12,490 million in 2023[40] - Adjusted EBITDA for 2024 was $1,540 million, reflecting a 6.0% increase from $1,453 million in 2023[40] Operational Metrics - On a same-store basis, net operating revenues increased 6.5% in Q4 2024 compared to Q4 2023[4] - Same-store admissions increased by 3.4% in Q4 2024 compared to the same period in 2023[5] - Admissions decreased by 5.6% to 104,644 in Q4 2024, compared to 110,874 in Q4 2023[36] - Admissions decreased by 3.2% to 422,040 in 2024 from 435,913 in 2023[40] - The average occupancy rate for beds in service was 52.5% in 2024, slightly up from 52.4% in 2023[40] - The number of hospitals at the end of Q4 2024 was 76, down from 78 at the end of Q4 2023[36] - The number of hospitals at the end of 2024 was 76, down from 78 in 2023[40] Cash Flow and Expenses - Net cash provided by operating activities for Q4 2024 was $216 million, compared to $90 million in Q4 2023[5] - Net cash provided by operating activities increased by 140.0% to $216 million in Q4 2024, up from $90 million in Q4 2023[36] - Net cash provided by operating activities increased by 128.6% to $480 million in 2024 from $210 million in 2023[46] - Total operating expenses for Q4 2024 were $2,986 million, representing 91.5% of net operating revenues, compared to 89.7% in Q4 2023[28] Future Projections - The company projects net operating revenues for 2025 to be between $12,200 million and $12,600 million[58] - The projected Adjusted EBITDA for 2025 is estimated to be between $1,450 million and $1,600 million[58] - The net loss per share - diluted for 2025 is projected to range from $(0.55) to $0.00[58] - The weighted-average diluted shares outstanding for 2025 are projected to be approximately 134 million[61] - Interest expense for 2025 is estimated to be between $840 million and $860 million[59] - The company expects depreciation and amortization to be approximately 3.5% of net operating revenues for 2025[59] Risks and Challenges - The company faces significant economic and competitive uncertainties, including high interest rates and geopolitical instability[65] - The company is subject to risks associated with substantial indebtedness and debt service obligations, impacting its ability to refinance[66] - Changes in healthcare public policy and potential alterations to Medicare and Medicaid programs could affect the company's operations[65] - The company anticipates challenges related to health insurance enrollment and the expiration of enhanced subsidies under the Affordable Care Act[65] - The company is exposed to cybersecurity threats and potential breaches affecting its information systems[66] - The company is navigating competitive labor market conditions, impacting its ability to hire and retain qualified medical personnel[66] Strategic Initiatives - The company completed two hospital divestitures in 2024 and divested a 50% interest in another hospital in February 2025[13] - The company is focused on integrating acquired hospitals and outpatient facilities to realize expected benefits and growth in patient service revenues[68] - The company is committed to realizing anticipated cost savings from its current strategic and operational cost-saving initiatives[68] - The consolidated operating results for the three months and year ended December 31, 2024, are not necessarily indicative of future results[67] - The company is actively monitoring the impact of emerging technologies, including artificial intelligence and machine learning, on its operations[66]

Hospital operator Community Health Systems, Inc. (CYH) is set to report fourth-quarter 2024 results on Feb. 18, 2025, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at 5 cents per share and the same for revenues is pinned at $3.16 billion. See the Zacks Earnings Calendar to stay ahead of market-making news.The fourth-quarter earnings estimate has increased a penny over the past month. The bottom-line estimate indicates a year-over-year impr ...