Community Health Systems (NYSE: CYH)
Community Health Systems is having a horrible day in the market today after announcing earnings for the most recent quarter before the market open. Unfortunately, CYH missed expectations in a big way. Today, we’ll talk about what we saw from the earnings report, how the market reacted to the news, and what we can expect to see from CYH moving forward. So, let’s get right to it…
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Community Health Systems Misses Earnings Expectations
As mentioned above, CYH produced its earnings report for the fourth quarter before the market open today. Unfortunately, the earnings report proved to be a big miss, leading to investor disappointment and poor movement on the stock. Here’s what we saw from the earnings report:
- Earnings Per Share – Earnings per share was the biggest miss of all for the company. While analysts expected that CYH would produce earnings in the amount of $0.95 per share, the company actually produced a loss. That loss came in at $0.28 per share, proving to be $1.23 per share under analyst expectations.
- Revenue – Revenue also proved to be a miss for the fourth quarter. Analysts expected that in the quarter, CYH would produce revenue in the amount of $4.99 billion. Unfortunately, the company was only able to produce revenue in the amount of $4.8 billion.
- Guidance – Finally, there was one thing that Community Health Systems reported that was in line with analyst expectations. That was guidance. In terms of guidance, analysts expected the company to shoot for $3.68 per share throughout the fiscal year 2016. The company reported guidance in the range between $3.40 per share and $3.80 per share.
How The Market Reacted To The News
As investors, we know that there are few things that can cause movement in the market quite like earnings. When a publicly traded company produces a solid earnings report, we can expect to see strong gains in the value of the stock. Adversely, when the company’s earnings report is negative, we tend to watch as the stock takes a dive. Unfortunately, the report released by CYH was anything but positive. As a result, we’re seeing investor disappointment and poor movement in the market. Currently (9:37), CYH is trading at $13.83 per share after a loss of $4.84 per share or 25.92% so far today.
What We Can Expect To See Moving Forward
Moving forward, I’m not expecting to see much by way of positivity surrounding CYH – at least not in the short-term view. The reality is that it’s rare when we see an earnings miss as large as the miss we saw from Community Health Systems. This is likely to weigh heavy on investor sentiment and lead to further downtrends. However, in the long run, things may turn out to be a bit different. After all, just about every great company has had to make its way over hurdles, and CYH is indeed a great company. While the poor earnings report may tarnish results in the short term, the downward movement may also open the door for getting in on long-term gains at a relatively low price.
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What Do You Think?
Where do you think CYH is headed moving forward and why? Let us know your opinion in the comments below!
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