(Reuters) - Hospital operator Community Health Systems Inc (CYH.N) 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 HMA.N, LifePoint Hospitals Inc (LPNT.O) and HCA Holdings Inc (HCA.N) 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 stabilizing.
“I was pleasantly surprised,” said Jefferies & Co analyst Brian Tanquilut.
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 inpatient admissions slowed.
Reporting By Susan Kelly in Chicago; editing by Carol Bishopric