Universal Health Services reported its second straight quarter of declining profits because of weak volumes in its acute-care hospitals, while US Oncology reported higher profits and announced a shareholder vote on a buyout proposal. Universal, based in King of Prussia, Pa., said its profits were $48.3 million, or 78 cents per share, for the quarter ended June 30, down 5.2% from nearly $51 million, or 82 cents per share, in 2003's second quarter. Revenue was up 15.8%, to just over $1 billion. For the six months ended June 30, profits were down nearly 9%, to $94.5 million, or $1.52 per share, compared with $103.7 million, or $1.66 per share, in the year-ago period. Labor, supply, bad-debt and other operating expenses all rose as a percentage of revenue for the three- and six-month periods, squeezing profit margins. Adjusted admissions rose 0.1% and 0.3% for the quarter and six months for acute-care hospitals Universal has operated for at least 12 months. The company's behavioral-health hospitals posted strong volume gains of 6.7% and 8.4% for the quarter and six months on a same-hospital basis. Universal owns or operates 26 acute-care and 44 behavioral-health hospitals.
Houston-based US Oncology reported a 39% increase in second-quarter profits and announced an Aug. 20 shareholder vote on a proposed buyout by investment firm Welsh, Carson, Anderson & Stowe. For the quarter ended June 30, net income was $24.5 million, or 27 cents per share, up from $17.7 million, or 19 cents per share, in the second quarter of 2003. Revenue rose 15% to $565.2 million, from $491.4 million in the year-earlier period. For the six months ended June 30, the company reported net income of $44.7 million, or 50 cents per share, up 31.7% from the year-earlier period. Revenue was $1.09 billion, up $16.2%. The cancer services company said operating cash flow improved because of lower accounts receivable and more accounts payable, as well as lower tax payments in anticipation of tax benefits from the proposed acquisition. -- by -- by Vince Galloro and Mary Chris Jaklevic