Tim Hingtgen

Shares of Community Health Systems popped more than 18 percent on Thursday after the Franklin-based hospital chain reported favorable third-quarter earnings and improving margins.

The health system saw its largest wave of COVID-19 patients in the three months ended Sept. 30, which made up 13 percent of overall admissions as demand across other sectors also increased. Adjusted admissions increased 4.7 percent compared to the same period last year, including surgeries, which increased 2 percent.

CHS saw revenues top $3.1 billion in the third quarter, a 0.4 percent decrease compared to last year, and a net income of $111 million, compared to $112 million in 2020.

CEO Tim Hingtgen said in an earnings call with investors on Thursday morning he expects the company to surpass their 15-percent margin goal by the end of the year, as they complete an array of cost-saving initiatives, including renegotiation of supply chain contracts and cutting labor costs. Hingtgen also highlighted the strength of CHS’s refined portfolio, positioning it in growing suburban markets where they are making key investments including expanded bed capacity, new outpatient access points, high acuity service lines, physician recruitment, telehealth, care coordination and the patient experience.

“These investments are working. They have greatly improved our competitive position and are creating opportunities for incremental market share gains into the future,” Hingtgen said in the call. “We put out at the beginning of the year, kind of our medium term targets to be above 15-percent margin in that kind of two-to-four-year time frame. I would say that the way we're looking at it, we're ahead of schedule.”

Community Health shares (Ticker: CYH) ended Thursday's trading session at $11.97, with volume strong at about 5.38 million shares traded (vs. an average of 1.36 million).