Shares of Community Health Systems Inc. fell sharply late Monday — minutes before the hospital operator reported second-quarter earnings that missed analysts’ estimates.
The late trading action pushed the Franklin-based company’s stock (Ticker: CYH) down 6.3 percent to $32.50. That drop was more than triple the decline registered by the Standard & Poor’s 500 Index.
After-hours traders briefly pushed the stock down another 5 percent to $31, but it quickly recovered to $32.50.
CHS, which last year acquired Triad Hospitals Inc., reported second-quarter profits of $47.9 million, down from $53.8 million a year ago. Per share, net income from continuing operations was 52 cents, 5 cents short of what analysts had expected.
Revenue more than doubled to about $2.7 billion, but margins were hurt by the rising cost of supplies and the much higher interest payments resulting from the Triad deal.
The company said reimbursement cuts in Indiana’s Medicaid program also pushed down earnings. CHS runs nine of its 117 hospitals in the northeastern part of that state.
Also hurting results was a slowdown in the growth of admissions. After posting a 3.8 percent year-over-year increase in the first quarter, CHS’ hospitals saw same-store growth of 2.3 percent in the three months ended June 30.
CEO Wayne Smith said the results were a testament to the company’s “consistent execution” following the Triad deal and said his team “will continue to identify operating synergies including reduced marketing and supply costs, target physician recruiting, centralized managed care negotiations and a more efficient allocation of capital.”
Through the first half of this year, CHS earned $101 million from continuing operations, down from $111 million in 2007. Revenue for the period rose 130 percent to $5.4 billion.
This week’s blows to CHS shares have pushed them to near their 2008 lows, set in February and March. Over the past year, the stock has fluctuated between $27.70 and $40.14.