* Q3 EPS, excluding items, $0.86 vs analysts' estimate of
* Q3 operating revenue rises 9 percent to $3.21 billion
* Lowers full-year earnings outlook
By Susan Kelly
Oct 30 Hospital operator Community Health
Systems Inc reported third-quarter profit that exceeded
analysts' estimates, but it trimmed its full-year profit
forecast due to higher interest expense and a delayed payment
from a California Medicaid program.
Patient volumes were stronger than those of several
competitors that have reported softer-than-expected results in
recent weeks amid the uneven economic recovery, analysts said.
In recent weeks, hospital operators including Health
Management Associates Inc, LifePoint Hospitals Inc
and HCA Holdings Inc have reported
weaker-than-expected results, disappointing investors who had
been watching for signs of a rebound in the sector.
Hospitals have struggled as patients without health
insurance or facing higher out-of-pocket costs for their medical
expenses shunned seeking care.
But Community Health, the second-largest U.S. for-profit
hospital operator, said its patient volume trends were
"I was pleasantly surprised," said Jefferies & Co analyst
Excluding a loss from the early retirement of debt,
Community Health said it earned 86 cents a share, unchanged from
a year ago. Its third-quarter operating revenue rose 9 percent
to $3.21 billion.
Analysts, on average, had expected the Franklin,
Tennessee-based company to earn 84 cents a share on revenue of
$3.21 billion, according to Thomson Reuters I/B/E/S.
Income from continuing operations fell to $58.8 million, or
49 cents a share, compared with $95.8 million, or 86 cents a
share, a year earlier.
The company, which owns, leases or operates 135 hospitals in
29 states, said total admissions increased 5 percent from a year
ago, helping to boost profit. Admissions at facilities owned at
least one year slipped 0.3 percent.
Community Health said it expects earnings of $3.80 per share
to $3.95 a share from continuing operations for the full year.
In July, the company had forecast full-year earnings of $3.90 to
$4.10 a share.
It said revenue anticipated from a California Medicaid
program is now expected in the first half of 2013.
However, it left unchanged its forecast for full-year net
operating revenue, excluding a provision for bad debts, at $12.8
billion to $13.2 billion.
Analysts, on average, were expecting a profit of $3.67 a
share, on revenue of $12.96 billion, for the full year.
Community Health also said it restructured its debt to
extend the maturities on most of its longer-term loans.
HCA, the largest for-profit hospital chain in the United
States, earlier this month said its third-quarter earnings would
be below analysts' estimates as growth in patient admissions