Community Health profit beats expectations
CHICAGO (Reuters) - Community Health Systems Inc (CYH.N), the hospital operator that wants to buy rival Tenet Healthcare Corp (THC.N), reported quarterly earnings above analysts' expectations as operating revenue increased.
Net income declined to $61.3 million, or 67 cents a share, from $70.0 million, or 75 cents a share, a year ago, due to impairment charges for a hospital that is for sale and a loss on the sale of a physician clinic, the company said.
Community Health, the second-largest U.S. hospital operator, said earnings from continuing operations were 80 cents a share.
On that basis, analysts on average expected 79 cents a share, according to Thomson Reuters I/B/E/S.
First-quarter net operating revenue rose 9 percent to $3.4 billion.
Total admissions rose 1.4 percent from a year ago, but admissions decreased 3.4 percent on a same-store basis.
Community Health went public in December with an unsolicited $3.3 billion bid for Tenet, which has been working to fend off the overture.
Tenet on April 11 filed a lawsuit accusing its unwanted suitor of admitting patients for needless hospital stays to inflate profits by overcharging Medicare and private insurers.
Community Health has filed a motion to dismiss the suit, calling Tenet's lawsuit "baseless," and said it would respond to the substance of the allegations on its first-quarter conference call on April 28.
The U.S. Department of Justice, multiple federal prosecutors' offices and the Office of the Inspector General for the Department of Health and Human Services are investigating the claims.
For 2011, Community Health backed its earlier forecast of income from continuing operations of $3.15 to $3.35 per share and net operating revenue of $13.9 million to $14.2 million.
(Reporting by Susan Kelly; Editing by Andre Grenon and Steve Orlofsky)