Community Health Systems Inc. (CHS), the owner of Porter hospital, is reporting a net income of $59.9 million or 65 cents diluted share for the fourth quarter of 2008, compared to a net income of $50.384 million or 53 cents per diluted share for the third quarter and a net loss of $88.3 million or 94 cents per share for the year-ago period.

For the year net income was $218.3 million or $2.32 per diluted share, compared to $30.3 million or 32 cents per diluted share for 2007.

“The fourth quarter of 2008 capped off another outstanding year for Community Health Systems Inc., highlighted by record annual revenues of over $10.8 billion and over $1 billion of net cash provided by operating activities,” CHS chair, president, and CEO Wayne Smith said in a statement released on Friday. “We were also pleased with our overall volume trends for the year, despite a moderate decline in admissions during the fourth quarter and the general economic downturn. While the expected macro economic trends indicate that hospital volumes will continue to come under pressure, we believe our continued success in enhancing essential healthcare services and recruiting and retaining qualified physicians in our markets will help support our growth through this uncertain environment. Our geographically diverse hospital portfolio also provides us with a competitive advantage with less exposure to more economically distressed markets.”

“As we look ahead to 2009, we will continue to leverage our considerable assets,” Smith added. “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. 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. We see considerable opportunities to realize additional operating synergies at our more recently acquired hospitals, including the facilities acquired in the Triad merger. While we acknowledge the challenges of an uncertain marketplace, we are confident in our ability to execute and look forward to the opportunities ahead.”

Net operating revenues for the fourth quarter were $2.762 billion, compared $2.773 billion for the third quarter and $2.49 billion for the year-ago period. Net operating revenues for the year were $10.84 billion, compared to $7.064 billion for 2007.

Income from continuing operations was $56.3 million or 61 cents per diluted share for the fourth quarter, compared to $51.4 million or 54 cents per diluted share for the third quarter and a loss from continuing operations of $71.9 million or 77 cents per share in the year-ago period. Income from continuing operations for the year was $206.7 million or $2.19 per diluted share, compared to $57.7 million or 61 cents per diluted share for 2007.

The consolidated results for the fourth quarter of 2008 reflect a 1.9 percent increase in total admissions compared to the year-ago period, CHS said, “primarily attributable to the addition of two hospitals acquired during the fourth quarter.” On a same-store basis, admissions decreased by 0.9 percent and adjusted admissions decreased by 0.2 percent, compared to the year-ago period.

The consolidated results for the full year reflect a 44.5 percent increase in total admissions compared to 2007, CHS said, “primarily attributable to the expansion of the company’s hospital portfolio in 2007 and the addition of two hospitals acquired during the fourth quarter.” On a same-store basis, admissions increased by 2 percent and adjusted admissions increased by 2.2 percent, compared to 2007.

For 2009 CHS is projecting net operating revenues in the range of $11.65 billion to $11.95 billion, down slightly from the third-quarter guidance of $11.8 billion to $12.1 billion.

CHS is projecting income from continuing operations in 2009 in the range of $2.45 to $2.65 per diluted share, down from the third-quarter guidance of $2.50 to $2.75 per diluted share.

CHS is projecting same-hospitals admission growth in 2009 of 1 percent to 2 percent, the same as it’s third-quarter guidance.

CHS is also projecting the acquisition of two new hospitals in 2009.

Other than two hospitals currently being held for sale, CHS does not project any additional operating divestitures in 2009.

Meanwhile, CHS has been informed by the U.S. Department of Justice that DOJ will be pursuing litigation against the company, in connection with the allegation of DOJ’s Civil Division that the company and three of its New Mexico hospitals “have caused the State of New Mexico to submit improper claims for federal funds in violation of the Federal False Claims Act.” CHS “continues to believe that it has not violated the Federal False Claims Act,” the company said.

Through its subsidiaries, CHS currently owns, leases, or operates 121 hospitals in 29 states with an aggregate of approximately 18,000 licensed beds. Through its subsidiary, QHR, CHS also provides management and consulting services to over 160 independent non-affiliated general acute care hospitals across the nation.

Posted 2/25/2009