Community Health Systems posted an eye-popping $1.43 billion loss from continuing operations in the second quarter as the hospital giant took a noncash write-down of goodwill of its assets, the company announced Tuesday.
The $1.43 billion, or $12.90 per share, loss compared with a profit of $117 million, or $1.01 per share, for the same period last year.
The write-down was made to better reflect the diminished value of hospitals and assets that CHS had previously bought or held, the company said.
The charges are $1.4 billion to reduce the goodwill of hospitals that CHS is keeping; $169 million for hospitals that the company is trying to sell; and $70 million for certain underperforming hospitals, CHS said.
Franklin, Tenn.-based CHS is selling 10 hospitals and could divest another 20 hospitals over the next 16 months, CHS CFO Larry Cash told investors in May. The company expects net proceeds of $530 million from the 10 hospitals.
CHS is scheduled to discuss its second-quarter results during an earnings call with analysts at 11 a.m. ET Wednesday.
The second-quarter results reflected a partial month of financials from Quorum Health Corp., a group of 38 rural hospitals that was spun off April 29 into a separate company.
Revenue in the second quarter fell 6% to $4.59 billion from $4.88 billion in the prior-year quarter.
Adjusted EBITDA and net cash from operations also plunged.
Adjusted EBITDA in the quarter was $563 million compared with $769 million in the prior-year quarter. Net cash from operating activities slumped to $338 million in the quarter from $565 million in the year-ago quarter.
Hospital admissions fell 9% and decreased 2% on a same-hospital basis.