UPDATE 1-Community Health Systems profit falls, outlook lowered
Oct 30 (Reuters) - Community Health Systems Inc reported sharply lower quarterly net profit on Wednesday due to a $98 million charge to cover eventual settlement of a U.S. government investigation into its Medicare admissions between 2005 and 2010.
The hospital operator also lowered its full-year earnings outlook, citing a challenging operating environment for healthcare providers and volume weakness.
For the third quarter, the company reported net income of $4.1 million, or 4 cents a share, compared with $44.2 million, or 49 cents a share, a year earlier.
Excluding one-time items, earnings were 72 cents a share, which beat the average analyst estimate of 68 cents a share, according to Thomson Reuters I/B/E/S.
Community Health, headquartered near Nashville, Tennessee, said it is still negotiating with the Department of Justice but believes that the reserve is sufficient to cover the claims and other related legal expenses.
The company said total admissions for the third quarter fell 6.8 percent, while net operating revenue rose by less than 1 percent to $3.22 billion. Analysts had forecast revenue of $3.24 billion.
"We have begun to realize the benefits of our cost management initiatives, and we remain focused on driving operating efficiencies across our hospital network," Wayne Smith, the company's chairman, president and chief executive officer, said in a statement.
For the full year, Community Health said it expects adjusted earnings of $2.85 to $3.10 per share, down from a previous forecast of $2.95 to $3.25. Analysts had forecast 2013 earnings per share of $2.96.
The company's shares, which fell 2 percent to close at $42.84 on the New York Stock Exchange, were not trading after hours.