Community Health Systems Inc. (NYSE: CYH) is looking and acting like it is an implosion waiting to happen. The reason for such a sharp drop is that the company has now projected a loss for its third-quarter earnings report. What is driving the loss may be a sea change event, at least for one of the lower valued companies in the hospital sector. Community Health saw a 10% drop in its operating revenue, and the company reduced the value of its hospitals.

24/7 Wall St. is focusing on the results due to the drop, but we also wanted to see which analysts were jumping ship here. Investors should take note of one very negative development: Community Health shares hit a new 52-week low. Hitting a low is never a good thing, but it is worse when the market is still near all-time highs.

After considering the impact of the QHC spin-off, its revenue for the third quarter will be approximately $4.38 billion, down from $4.846 billion for the same period in 2015. Its projected loss was put at $83 million, versus pretax operating income of $121 million a year earlier. Also lower were expected cash from operations, adjusted EBITDA, operating income and the impairment of goodwill and long-lived assets.

The poor results reflect a 12.4% drop in total admissions and a 13.0% drop in adjusted admissions. The company noted an actual gain on a partial basis:

On a same-store basis, consolidated net operating revenues for the three months ended September 30, 2016 are expected to increase over the prior year period by approximately 1.2 percent. Same-store consolidated salaries and benefits expense is expected to increase as a percentage of consolidated net operating revenues from 46.0 percent for the three months ended September 30, 2015, to approximately 47.1 percent for the three months ended September 30, 2016.

24/7 Wall St. has so far tracked down four analyst calls on the stock, with more likely coming. These analyst calls were seen as follows:

• Credit Suisse already had a Neutral rating, but it slashed its target to $7 from $12.
• Jefferies maintained its Hold rating but cut the target price to $9 from $11.75.
• Mizuho downgraded the stock to Underperform from Neutral, and it slashed its price target to a mere $3 from $10.50.
• Robert W. Baird downgraded the shares to Underperform and slashed its price target to $8 from $12.

If you want to see what ugly looks like: Community Health Systems shares were down almost 44% at $5.69 late Thursday morning. Its new 52-week range is $5.66 to $26.55, and the new market cap is a mere $644 million.

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