- Low patient volume and reimbursement reductions will drive down Q3 earnings for CHS, the company warned analysts.
- Its common stock plunged from $10.03 at the close of business Wednesday to $5.08 per share at the close of business Thursday. The stock market reaction followed the preview of Q3 results released by CHS on Wednesday. A complete quarterly earnings report will be issued next week.
- In the preview to third-quarter results, CHS revealed it expected to post an $83 million operating loss for the quarter, compared with an operating income of $121 million during the same time last year.
CHS also announced its third-quarter operating results reflected a 12.4% year-over-year decline in total admissions.
The blow is the latest in a barrage of heavy hits landing on the operator of 152 hospitals in 22 states. CHS recently continued efforts to shed debt through the sale of a majority stake in its home health division. The embattled hospital operator had announced in June it would divest from 10 hospitals with the potential for up to 20 more. CHS recently announced the sale of four more hospitals and rumors arose that an investment firm was interested in purchasing CHS assets.
It should come as no surprise that investors are running away from CHS. The hospital operator accrued enormous amounts of debt over the past decade, according to a recent Wall Street Journal article. However, patient admissions at CHS hospitals have lagged behind admissions at other hospitals over the same time span. In an attempt to right the ship, CHS executives say they will turn their attention to larger hospitals and regional networks.