HealthSouth Corp. surpassed industry expectations when it released its fourth quarter and fiscal 1995 earnings last week, analysts said. For the year, the company reported a 22% increase in revenues to $1.6 billion.
The Birmingham, Ala.-based rehabilitation and outpatient surgery services company reported a 617% leap in net income for the fourth quarter ended Dec. 31, 1995, to $33 million, or 30 cents per share, from $4.6 million, or 5 cents per share, in the year-ago quarter. Revenues for the quarter grew 21% to $417 million.
HealthSouth said the dramatic rise in net income reflected nonrecurring charges related to acquisitions posted in the quarter and the year-ago quarter. The company said nonrecurring expenses reduced net income by $3 million for the quarter and $28 million for the fiscal year. Fourth-quarter income before nonrecurring expenses rose 132% to $36 million, or 33 cents per share, from $15.5 million, or 18 cents per share, in the year-ago period.
During 1995, HealthSouth acquired Surgical Health Corp., Sutter Surgery Centers and Caremark Orthopedic Services. Once the company completes its previously announced acquisition of Advantage Health Corp., it will provide rehabilitation and outpatient surgery services at more than 850 locations in 45 states.
For the year, the company reported a 56% rise in net income to $78.9 million, or 82 cents per share, from $50.5 million, or 58 cents per share, in 1994.
Analysts attributed HealthSouth's healthy performance to its success in both integrating recently acquired businesses and cutting costs aggressively.
The company has benefited from cross-referrals between its ambulatory surgery centers and its outpatient rehabilitation facilities, according to Andrew May, an analyst with J.C. Bradford & Co. in Nashville, Tenn. HealthSouth's acquisitions also enabled it to increase the number of managed-care arrangements it has by 60%, to about 1,200, during the fourth quarter, May said>