Why Community Health Systems Shares Are Plunging Today

Community Health Systems Inc CYH shares are plunging after the company reported mixed Q1 earnings.

The company reported an adjusted EPS loss of $(0.43), missing the consensus of $(0.16), and a turnaround from an income of $0.14 a year ago.

Community Health posted Q1 sales of $3.11 billion, slightly above the consensus of $3.09 billion.

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

Adjusted EBITDA for the three months ended March 31, 2023, was $335 million compared to $409 million a year ago, primarily due to lower acuity & unfavorable changes in payor mix, increased salaries & benefits expense, increased rates for outsourced medical specialists and a reduction in pandemic relief funds recognized.

The company did witness stronger volumes, higher reimbursement rates, and reduced expenses for contract labor during the quarter.

During Q1 FY22, pandemic relief funds positively impacted Adjusted EBITDA of approximately $47 million.

Price Action: CYH shares are down 35.20% at $4.04 on the last check Tuesday.