Hospital companies posted a strong 31% increase in adjusted earnings in the second quarter, and healthcare industry profits as a whole moved ahead 8%, according to WDI Capital Markets.
The Hilton Head Island, S.C.-based investment banking and advisory firm tracks the financial performance of 400 publicly held healthcare companies. WDI factors-in accounting adjustments, restructurings and one-time write-offs.
All the provider segments did well in the second quarter, showing increases in profits that outpaced revenue gains (See chart). For example, hospital chains showed a 31% gain in profits on a 7% increase in revenues, WDI reported.
"The bottom line is they have become very good managers," said Jack Cumming, WDI's president.
Home healthcare companies registered the strongest gains among providers, however. That segment reported a 90% gain in adjusted earnings on a 36% revenue increase.
Long-term-care companies reported a 38% gain in adjusted earnings on a 17% increase in revenues, WDI reported. Two leading nursing home chains, Fort Smith, Ark.-based Beverly Enterprises and Silver Spring, Md.-based Manor Care, both reported earnings gains of more than 30%.
In outpatient services, providers reported adjusted earnings that were up 34% on a 17% increase in revenues. Rehabilitation company earnings also were up 31% on a 74% increase in revenues.