Community Health Systems Eyes More Hospital Divestitures After Q4 Earnings

The Franklin, Tennessee-based for-profit operator currently owns or leases 65 affiliated hospitals and has reduced its portfolio by roughly 35% since 2019.

Community Health Systems (CHS) indicated that further hospital divestitures remain under consideration in 2026, even as executives said the company is nearing the end of its programmatic selloff strategy.

Speaking during the company’s fourth-quarter earnings call, CEO Kevin Hammons said CHS is “getting closer to the end of our programmatic divestitures,” but remains in early discussions on “a couple transactions” that may not ultimately close.

The Franklin, Tennessee-based for-profit operator currently owns or leases 65 affiliated hospitals and has reduced its portfolio by roughly 35% since 2019.

Hammons said the company is receiving inbound interest for hospitals in stronger markets but is taking a more selective approach. “We’re very comfortable with our portfolio as it stands, and we really want to be just opportunistic about transacting hospitals,” he told analysts, adding that decisions to divest would depend on economic conditions or opportunities to materially deleverage.

CHS reported $3.14 billion in total net operating revenues for the fourth quarter, in line with expectations. While revenue declined 4.9% year over year, it increased 2.1% on a same-store basis. Net income attributable to stockholders reached $110 million ($0.81 per diluted share), compared to a $70 million net loss in the prior-year quarter. Excluding adjusting items, attributable net income was $0, an improvement from a $0.42 per diluted share loss a year earlier.

Adjusted EBITDA for the quarter totaled $395 million, down from $428 million in the prior year. CHS attributed the decline to reduced volumes and lower net benefit from supplemental reimbursement programs, partially offset by higher reimbursement rates.

For the full year, CHS posted $12.49 billion in net operating revenues, down 1.2% year over year but up 4.6% on a same-store basis. The company reported $509 million in net income attributable to stockholders, reversing a $516 million loss in 2024. Adjusted EBITDA for the year was $1.53 billion, slightly below 2024 levels.

CHS also reported its first year of positive free cash flow in some time, aided in part by asset sales. For 2026, the company projects revenues between $11.6 billion and $12 billion and adjusted EBITDA between $1.34 billion and $1.49 billion. Executives noted potential headwinds from exchange plan disenrollments, estimating a $100 million to $120 million net revenue impact and a $20 million to $30 million EBITDA reduction.

Shares were flat in Thursday trading following the earnings release.

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