Hospitals operator HealthSouth Corp. (HLS) reported Monday a profit for the third quarter that declined from last year, despite revenue growth, reflecting the absence of a gain this year. However, both earnings per share from continuing operations and quarterly revenues topped analysts' expectations. The company also trimmed earnings forecast for the full-year 2014.
"The third quarter was another solid quarter for HealthSouth. Discharges grew 3.8% against growth of 5.7% in the third quarter of 2013. We also made excellent progress in the quarter on setting the stage for growth in 2015," President and CEO Jay Grinney said in a statement.
The Birmingham, Alabama-based inpatient rehabilitation hospitals operator reported net income of $48.5 million or $0.52 per share for the third quarter, lower than $52.5 million or $0.58 per share in the prior-year quarter.
Income from continuing operations for the quarter declined to $65.7 million or $0.53 per share from $73.2 million or $0.59 per share in the year-ago quarter.
The company said earnings for the year-ago quarter benefited from a $0.13 per share gain in government, class action, and related settlements associated with recoveries on judgments against former officers and related matters.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.
Consolidated net operating revenues for the quarter grew 5.8 percent to $596.9 million from $564.0 million in the same quarter last year, and topped thirteen Wall Street analysts' consensus estimate of $595.3 million.
The company said the revenue growth was attributable to a 3.8 percent rise in patient discharges and a 2.7 percent increase in net patient revenue per discharge. Discharge growth included a 1.9 percent improvement in same-store discharges.
Looking ahead to fiscal 2014, the company trimmed guidance for income from continuing operations to a range of $2.24 to $2.27 per share from the prior forecast in the range of $2.25 to $2.31 per share. Street is currently looking for full-year 2014 earnings of $2.05 per share.
The company said its prior guidance did not include debt-related charge of about $0.08 per share to be recorded in the fourth quarter of 2014.
"We expect the continued construction of three de novo hospitals, the continued progress with Mountain States Health Alliance toward owning and operating Quillen Rehabilitation Hospital in Johnson City, Tennessee, and the continued capacity expansion of our existing hospitals will allow us to add 211 new beds to our existing portfolio prior to January 2015," Grinney added.
HLS closed Monday's regular trading session at $40.55, up $0.11 or 0.27% on a volume of 0.39 per share. However, the stock lost $0.80 or 1.97% in after-hours trading.
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