Community Health Systems more than quadrupled its net loss to shareholders in the first quarter of 2019.
The Franklin, Tenn.-based hospital chain reported Tuesday its net loss attributable to shareholders was $118 million in the three months ended March 31, compared with a $25 million net loss in the prior-year period.
For-profit CHS' adjusted earnings before interest, taxes, depreciation and amortization dropped by 11.1% in the first quarter of 2019 to $391 million, compared with $440 million in the prior-year period.
CHS reported $3.38 billion in net operating revenue in the quarter, compared with $3.69 billion in the prior-year period. While down 8.5% year-over-year, the company's revenue came out ahead of an estimate from Zacks Investment Research, which predicted $3.31 billion in first quarter revenue. CHS' expenses declined 8.3% in the first quarter year-over-year.
The loss attributable to CHS' stockholders worked out to $1.04 per share, exceeding Zacks' loss estimate of $0.44 per share.
"Overall we made good progress during first quarter, and we expect to continue to drive additional growth during the remainder of 2019," CHS CEO Wayne Smith said on the company's earnings call Wednesday morning.
CHS' same-store admissions were basically flat—down 0.1%—in the first quarter year-over-year, and adjusted admissions increased 0.8%.
CHS divested seven hospitals in the first quarter of 2019, a factor that throws consolidated admissions figures out of whack. On a consolidated basis, total admissions declined 13.4% in the quarter.
CHS said it will continue to sell hospitals throughout this year. The system fell far short of its 2018 divestiture goals.
At the end of 2018, CHS had generated $400 million in gross proceeds on divestitures—less than than half of its $1.3 billion target for the end of that year. On Wednesday's call, Smith announced proceeds from divestitures are now up to about $550 million. CHS is extending the deadline on its $1.3 billion target to the end of this year.
Smith also said the closed divestitures now account for about $1.5 billion in annual net revenue, up from $1.1 billion at the end of 2018. CHS also missed its original goal of divesting hospitals in 2018 that accounted for $2 billion in combined revenue in 2017. The company's new goal is to hit that amount by the end of this year.
"We expect to complete our divestiture program in 2019," he said.
The divestitures are part of an effort to bring down CHS' heavy debt load, which only dropped by $7 million year-over-year and ended the first quarter of 2019 at about $13.4 billion.
Smith's total compensation grew by 42% last year to $7 million, driven mostly by quadrupled cash incentive pay because the company hit revenue and earnings targets. That's despite the fact that CHS' stock price fell 34% over the year to $2.82 per share on Dec. 31, 2018.
Tim Hingtgen, CHS' chief operating officer, said the company is focused on adding more on-demand access points. CHS opened four such locations during the first quarter, bringing its total count to 101, including twelve freestanding emergency departments.
Hingtgen said although this year's light flu season resulted in lower acuity emergency department visits overall, CHS hospitals are seeing more patients admitted through their emergency departments.