Community Health slumps ~35% after payor mix, salaries weigh on Q1 net loss

Community Health Systems (NYSE:CYH) stock slumped ~34% on Tuesday after Q1 saw a wider net loss.

Net loss attributable to CYH stockholders was -$51M, compared to -$1M in Q1 2022.

Non-GAAP net loss per share was -$0.43, compared to a non-GAAP EPS of $0.14 in the prior year period, missing analysts' estimates.

Community Health said the increase in net loss attributable to CYH and decrease in Adjusted EBITDA was mainly due to lower acuity and unfavorable changes in payor mix, increased salaries and benefits expense.

The decline was also because of increased rates for outsourced medical specialists and a reduction in pandemic relief funds recognized, partially offset by stronger volumes, higher reimbursement rates and reduced expense for contract labor.

Adjusted EBITDA was $335M, versus $409M in Q1 2022.

Net operating revenues were flat Y/Y to ~$3.11B, but surpassed expectations. On a same-store basis, net operating revenues grew 1.7% Y/Y, according to the company.

The company noted that net cash provided by operating activities was $5M, compared to $101M in Q1 2022.

On a same-store basis, admissions increased 4.8% and adjusted admissions grew 9.4%, compared to the same period in 2022.

Outlook:

Community Health reaffirmed its FY 2023 outlook. The company expects net operating revenues to be between $12.2B and $12.6B (Consensus $12.37B). CYH expects net loss per share to be in the range of -$0.65 to -$0.05.