Community Health Systems, the largest single Williamson County employer, announced on Wednesday that it will post a larger quarterly loss than expected, in anticipation of its coming full third quarter report.
The Franklin-based national hospital chain, which employs some 5,000 people in Williamson County, expects an $83 million loss in continuing operations over the quarter.
In light of this, the company cut its year-long projection for adjusted earnings before interest, tax, depreciation and amortization, from $2.4 billion- $2.55 billion down to $2.2 billion- $2.28 billion.
Last week, it sold off an 80 percent share of its Home Health division for $128 million in cash in an ongoing effort to reduce debt, as its share price has continued to fall all year.
Shares fell nearly 50 percent since the news on Wednesday, to $5.63 at noon on Thursday, down from around $10 last week — and $60 at this time last year. In the second quarter of this year CHS reported a $1.43 billion loss in continuing operations.
“The lower than anticipated results were primarily caused by lower than expected volume and the resulting lower net operating revenues, as well as larger than anticipated reductions to reimbursement from state supplemental programs,” according to a CHS release. “These results were also affected by a failure to achieve anticipated expense reductions as the Company experienced increases in health insurance costs, costs of state supplemental programs, medical specialist fees, and implant supply costs, among other expenses.”
The company has previously announced plans to reduce and refine its overall portfolio with proceeds being used to pay down debt. In another action over the summer, CHS spun off Quorum Health Corp., 38 smaller, rural hospitals, into its own public company, raising $1.2 billion, according to its quarterly reports. It also sold for $445 million its interests in four Las Vegas Hospitals.
“Community Health Systems’ primary focus continues to be on delivering high-quality health services in the communities where we operate,” said CEO Wayne Smith in a statement in September.
CHS, the second biggest for-profit hospital chain in the country by revenue, owns, leases or operates 153 affiliated hospitals in 22 states with an aggregate of nearly 27,000 licensed beds.
Its fall largely comes from debt, and poor past acquisitions. It has been trying to shed some of that debt this year, and raise cash.
It is trying to sell off at least 12 hospitals, some of which it just bought in a 2014 acquisition of Health Management Associates, an indebted chain of more than 60 hospitals that CHS paid $3.9 billion for.
CFO Larry Cash said in an August release that of the 153 hospitals CHS currently operates, the former HMA facilities continued to post losses- 3 percent in the second quarter.
