By KEVIN NEVERS

Community Health Systems Inc. (CHS) of Franklin, Tenn., the owner of Porter hospital, is reporting a net income of $60.1 million or 63 cents per diluted share in the first quarter of 2008, compared to a net loss of $88.3 million or 94 cents per diluted share in the fourth quarter of 2007 and a net income of $54.3 million or 58 cents per diluted share in the year-ago period.

CHS attributed the net loss in the fourth quarter to increases in its contractual reserves and doubtful-account allowances due to lower collectability rates.

“Community Health Systems is off to a very solid start for 2008,” CHS Chair, President, and CEO Wayne Smith said in a statement released on Tuesday. “Our first-quarter results reflect our ability to drive revenues and improve the operating performance of both our existing and recently acquired facilities. In addition, the favorable admission trends are due in part to a strong flu season and the additional day during the quarter period because the current year is a leap year.”

“Our strategic focus for 2008 will be on pursuing growth opportunities within our existing markets,” Smith added. “As we continue our integration efforts, we are expanding our proven business model and identifying operating synergies in order to drive improved returns on the additional assets acquired in 2007. Toward that end, we remain focused on the key areas for success in our business—an effective centralized and standardized operating platform, disciplined cost management, a successful physician recruitment program, and strategic investments to ensure we have the right equipment, technologies, and clinical services for our hospitals. We are very pleased with our progress to date and remain confident in our ability to extend our record of growth as we move Community Health Systems forward in 2008.”

Net operating revenues for the first quarter—which includes consolidated results from the acquisition of Triad Hospitals Inc. on July 25, 2007—were $2.728 billion, compared to $2.528 billion for the four quarter of 2007 and $1.154 billion for the year-ago period.

Income from continuing operations for the first quarter was $51.5 million or 54 cents per diluted share, compared to a loss from continuing operations in the fourth quarter of $70.6 million or 75 cents per diluted share and an income from continuing operations in the year-ago period of $57.3 million or 61 cents per diluted share.

Income on discontinued operations for the first quarter consisted of an after-tax gain of approximately $8.6 million or 9 cents per diluted share, related to the sale of 11 hospitals during the first quarter. Loss from discontinued operations for the fourth quarter consisted of an after-tax loss of $17.6 million or 19 cents per share, related to the sale of three hospitals during the second half of 2007 and the holding of 12 hospitals for sale at Dec. 31. Loss from discontinued operations for the year-ago period consisted of an after-tax loss of approximately $3 million or 3 cents per diluted share, related to the sale of one hospital in March 2007.

The consolidated results reflect a 111.1 percent increase in total admissions compared to the year-ago period, related chiefly to the expansion of the company’s hospital portfolio. On a same-store basis, admissions increased 3.8 percent over the year-ago period. Also on a same-store basis, net operating revenues increased 5.7 percent over the year-ago period.

CHS expects to acquire Empire Health Systems of Spokane, Wash., sometime in the fourth quarter but is currently assuming no other acquisitions this year. Other than the previously announced sale of hospitals currently being held for sale, only one other divestiture is being assumed in 2008.

Through its subsidiaries, CHS currently owns, leases, or operates 116 hospitals in 28 states with an aggregate of approximately 17,000 licensed beds, compared to 70 hospitals with 8,406 licensed beds on Dec. 31, 2006.

Posted 4/30/2008