Losses at Community Health Systems continued to mount in the third quarter as the troubled hospital company considers a sale.
In a preview of third-quarter results to be announced next week, Franklin, Tenn.-based CHS Wednesday reported a loss from continuing operations before income taxes of $83 million compared with income from continuing operations of $121 million in the third quarter of 2015.
Hospital divestitures, lower-than-expected volumes and reductions to reimbursement from state supplemental programs combined to cause revenue to fall in the quarter to $4.4 billion from $4.8 billion in the year-earlier quarter, the company said.
CHS is the nation's second-largest investor-owned hospital company with 159 hospitals.
Excluding a goodwill impairment charge of 28 cents per share on four hospitals it is selling and a further charge against the hospitals it is keeping, CHS posted a loss from continuing operations of 35 cents per share for the quarter. That compared with an operating gain of 51 cents per share in the year-earlier quarter.
Saddled with $15 billion of debt, CHS is exploring hospital divestitures, including the possible sale of the entire company. Private equity group Apollo Capital Partners is rumored to be interested in some or all of CHS. The group entered the hospital business last year by purchasing RegionalCare Hospital Partners, which grew to 18 hospitals through the merger this year with Capella Healthcare to create RCCH HealthCare Partners
Among the four hospitals CHS is selling are three in Mississippi and one in Florida. CHS plans to use the proceeds of the sale to not-for-profit Curae Health of Clinton, Tenn., to reduce debt. All four hospitals were acquired in 2014 as part of the disastrous $7.6 billion acquisition of Health Management Associates.
CHS has struggled to integrate those HMA hospitals into its system.
CHS also has announced that it has four additional buyers for eight other hospitals it has on the blocks. Those deals are still being worked out.
CHS is coming off a loss from continuing operations in the second quarter of $1.43 billion, or $12.90 per share, after taking a noncash write-down of goodwill on the sinking value of hospitals it bought over the years, including those acquired in the HMA deal.