Community Health Systems fell short of the market’s earnings and revenue expectations during its second quarter, posting a loss when excluding funds received for its recent hospital divestitures.
The for-profit reported Wednesday after market close net operating revenues of $2.83 billion. Net income attributable to stockholders was $70 million, or 50 cents per diluted share, but fell to a 19 cents per diluted share loss after excluding the facility sales and other adjusting items.
The reported revenue and adjusted earnings are about $70 million and nine cents per share behind analysts’ estimates, per Seeking Alpha.
The latter also outpaces the five cents per share net loss the system had logged for the same period last year, despite a same-store net operating revenue increase of 2.4% and same-store admissions and adjusted admissions gains of 1.9% and 2.9%.
The company primarily attributed the year-over-year performance decrease to “an unfavorable change in payor mix and higher medical specialist fees.” These outpaced the improved volumes as well as greater reimbursement rates, higher net benefit from supplemental reimbursement programs and tightened contract labor and professional liability expenses, according to the release.
“Our dedicated team is making measurable progress across top priorities that include clinical quality, patient and physician experience and employee satisfaction, while also investing in initiatives designed to fuel future growth,” CEO Kevin Hammons said in the earnings release. “We are confident in our ability to deliver long-term value by managing the factors within our control and successfully navigating the dynamic macroeconomic environment.”
CHS also noted that it used $600 million from its hospital sales to repurchase some of its outstanding debt.
Executives will elaborate on the quarter’s results in an earnings call scheduled for Thursday morning.
The results also follow a red first quarter for CHS, on which it blamed a “temporary disruption in demand” across each of its markets related to consumers’ macroeconomic concerns. The company reported $12.5 billion total net operating revenues and a $509 million net gain ($3.77 per diluted share) across 2025 (or $1.19 per diluted share after adjustment).
The country’s largest for-profit health system, HCA Healthcare, already threw cold water on this quarter’s earnings season last week when its shared preliminary Q2 results suggesting a greater-than-expected payer mix decline tied to the Affordable Care Act exchanges. The system in April had predicted a $600 million to $900 million full-year unfavorable impact from disruptions stemming from the end of enhanced subsidies, but shifted its projections to a $1 billion to $1.2 billion drag.