(Reuters) - Lower patient admissions and hurricane-led disruptions in business led Community Health Systems Inc (CYH.N) to report a wider-than-expected loss in the third quarter and the debt-laden hospital operator cut its full-year revenue forecast.
The shares of the company fell about 12 percent in after-market trading on Wednesday.
Community Health has been selling less-profitable hospitals to pare its pile of debt even as the company recently came under investor pressure to replace its Chief Executive Wayne Smith.
The company, according to Piper Jaffray, sold 11 hospitals or about 1,920 beds in the quarter and managed to bring down its net debt to $13.9 billion from $14.8 billion last year.
“We believe the selling of unprofitable hospitals to pay down debt is more of a Band-Aid on the situation, rather than a long-term solution to debt pay down,” Piper Jaffray analysts wrote in a client note.
Net loss attributable to the company widened to $110 million, or 98 cents per share, in the third quarter ended Sept. 30, from $79 million, or 71 cents per share, a year earlier.
Excluding items, Community Health posted a hefty loss of 77 cents per share, compared with analysts’ estimates of 30 cents per share, according to Thomson Reuters I/B/E/S.
Adjusted admissions for the hospital operator fell 15.5 percent in the quarter, the company said.
Weak patient admissions are likely to hurt U.S. hospital operators through 2018 as patients fret about soaring out-of-pocket costs and uncertainty over the fate of Obamacare.
Community Health also incurred a $40-million loss in the quarter as Hurricanes Harvey and Irma disrupted hospital operations in key facilities in Florida and Texas.
“Operating deterioration appears to be offsetting asset sales,” KeyBanc Capital Markets analyst Jason Gurda said.
The company said net operating revenue fell about 16 percent to $3.67 billion, in-line with the analyst average estimate.
The company now expects net operating revenue - excluding provision for bad debts - to be between $15.80 billion and $15.90 billion from the previous range of $15.85 billion to $16.05 billion.
Shares of Community Health, which tumbled to close at $5.44 in regular hours, slipped further to $4.79 in after-market trading.
Reporting by Divya Grover in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur