Community Health Systems (NYSE:CYH) shares were set to open down approximately 32% on Thursday after the hospital operator lowered its full-year outlook and revealed the upcoming retirement of its CEO.
Based in Franklin, Tennessee, the company posted second-quarter adjusted earnings per share of ($0.05), outperforming analyst expectations of ($0.10). Revenue came in at $3.13 billion, above the consensus forecast of $3.02 billion but slightly below the $3.14 billion reported in the same quarter last year.
Despite the earnings beat, Community Health trimmed its full-year adjusted EBITDA guidance to a range of $1.45 billion to $1.55 billion, down from the prior range of $1.45 billion to $1.60 billion. The company attributed the revision to decreased outpatient volumes, lower patient acuity, and unfavorable shifts in payor mix impacting quarterly results.
In a separate update, Community Health announced that CEO Tim Hingtgen will retire effective September 30, 2025. Kevin Hammons, currently president and CFO, will step in as interim CEO, with Jason K. Johnson, senior vice president and chief accounting officer, appointed interim CFO.
On a same-store basis, admissions rose 0.3%, while adjusted admissions fell 0.7% compared to the same period in 2024. Same-store net operating revenues increased 6.5% year-over-year.
Following these announcements, Jefferies downgraded Community Health from Buy to Hold and lowered its price target from $4.25 to $3.00.
“We D/G to Hold given 1) soft Q2 trends that translated to an EBITDA miss, despite CYH recognizing TN & NM DPP payments during the quarter, 2) go-forward earnings uncertainty related to the impacts of the OBBBA’s legislation and scheduled eAPTC expiration at year-end that likely translates to an increase in CYH’s already-elevated leverage ratio, & 3) mgmt uncertainty given CEO transition, at a time when hospitals are facing new regulatory headwinds,” wrote Jefferies analyst Brian Tanquilut.
Additionally, the company disclosed it had finalized an agreement to sell select ambulatory outreach laboratory services to Laboratory Corporation of America (NYSE:LH) Holdings for $195 million.
Community Health Systems stock price
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