LifePoint, CHS turn in mixed results

Hospital companies guide '09 to different ends of analysts' ranges

Email | Print By Geert De Lombaerde

Of the region’s largest publicly traded hospital operators, Community Health Systems appears to have started 2009 with more momentum.

Both CHS and LifePoint Hospitals reported fourth-quarter earnings since the markets closed yesterday. The companies also established their outlooks for the coming year.

Community Health Systems late Thursday reported fourth-quarter profits of $59.9 million on revenue of almost $2.8 billion. In late 2007, the company had lost $88.3 million on $2.5 billion in revenue.

Earnings from continuing operations at the Franklin-based company swung from a late-2007 loss of $72 million to $56.3 million, or 61 cents per diluted share. Analysts had expected 60 cents.

Cost containment played a big role in the earnings jump: Year over year, personnel expenses fell two percentage points as a share of revenue while bad debt provisions fell from to 11.5 percent of sales from more than 14 percent.

“Most importantly, we have shown our ability to deliver favorable operating results through our efforts to implement best practices in all of our facilities across the country,” said Chairman, President and CEO Wayne Smith. “We have a very conservative operating strategy and are mindful of the critical need to manage our costs and drive margin, particularly in this economic environment.”

Smith and his team said they expect continuing operations to produce profits of between $2.45 and $2.65 per diluted share this year. Before yesterday’s numbers, analysts were expecting something between $2.20 and $2.72, with the consensus at $2.49.

At Brentwood-based LifePoint, net income edged up to $30.8 million from $30.6 million, but fell as a percentage of revenue, which rose 5 percent to $675 million. Profits from operations were 63 cents per diluted share, a penny below expectations.

Adjusted admissions fell 0.7 percent to $91.3 million, but revenue per patient rose almost 6 percent to $7,390.

For 2009, LifePoint execs say they expect per-share profits to come in between $2.25 and $2.55. Analysts’ expectations before this morning’s report ranged between $2.28 and $2.78, with the consensus at $2.52.

Click here to view CHS’ numbers. For LifePoint’s earnings release, click here.