LifePoint Hospitals, Brentwood, Tenn., reported second-quarter earnings well below expectations, citing higher-than-expected amounts of bad debt, contract labor costs and professional fees, and medical malpractice insurance expense.
The company said that it earned $13.4 million for the quarter on revenue of $654.3 million, compared with profits of $34.8 million on revenue of $560.2 million in 2006s second quarter. On a per-share basis, earnings on continuing operations were 43 cents, compared with analysts expectations of 61 cents. On a same-hospital basis, admissions were down 0.4%, although equivalent admissions, which combine inpatient and outpatient volume, rose 1.5%.
This years second quarter saw bad-debt expense rise to 12.4% of revenue, compared with 10.2% in the year-ago quarter. Other operating expenses, which include medical malpractice insurance, climbed to 18.8% of revenue from 17.6% of revenue in the year-ago quarter. The most recent quarter also included an impairment charge of $16.4 million related to the sale of 41-bed Coastal Carolina Medical Center, Hardeeville, S.C., to Tenet Healthcare Corp., Dallas.
LifePoint also lowered its profit estimates for the rest of 2007. The company said it expects bad debt to remain in a range of 12% to 13% of revenue. Admissions are expected to remain flat to up 1%, the company said. LifePoint operates 49 hospitals in 18 states.
LifePoint shares traded more than 15% lower after the earnings release, from Fridays close of $39.11 to just below $33 in midday trading.
-- by Vince Galloro