Revenue during the quarter dropped 9.62 percent to $4,380 million from $4,846 million in the previous year period. Gross margin for the quarter contracted 78 basis points over the previous year period to 83.49 percent. Total expenses were 96.67 percent of quarterly revenues, up from 92.76 percent for the same period last year. That has resulted in a contraction of 391 basis points in operating margin to 3.33 percent.

Operating income for the quarter was $146 million, compared with $351 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $465 million compared with $661 million in the prior year period. At the same time, adjusted EBITDA margin contracted 302 basis points in the quarter to 10.62 percent from 13.64 percent in the last year period.

Commenting on the results, Wayne T. Smith, chairman and chief executive officer of Community Health Systems, Inc., said, "Our operating and financial performance in the third quarter was below expectations due to lower than expected volumes and higher than expected expenses in certain areas. Moving into the fourth quarter, we are intensely focused on driving operational improvements and generating better results. We believe that performance improvements, combined with our portfolio rationalization efforts, should ultimately create a stronger portfolio of hospitals for the future."

For financial year 2016, Community Health Systems, Inc. forecasts diluted earnings per share to be in the range of $0.30 to $0.50.

Cash flow from investing activities was $751 million for the nine month period as against cash outgo of $777 million in the last year period. It has incurred net capital expenditure of $551 million on net basis during the nine month period, down 19.33 percent or $132 million from year ago period.

The company has spent $1,612 million cash to carry out financing activities during the nine month period as against cash outgo of $161 million in the last year period.

Cash and cash equivalents stood at $133 million as on Sep. 30, 2016, down 28.49 percent or $53 million from $186 million on Sep. 30, 2015.

Working capital declines
Community Health Systems, Inc. has witnessed a decline in the working capital over the last year. It stood at $1,855 million as at Sep. 30, 2016, down 22.64 percent or $543 million from $2,398 million on Sep. 30, 2015. Current ratio was at 1.69 as on Sep. 30, 2016, down from 1.76 on Sep. 30, 2015.

Days sales outstanding went up to 70 days for the quarter compared with 68 days for the same period last year.

At the same time, days payable outstanding went down to 138 days for the quarter from 142 for the same period last year.