LifePoint Health got the important first-quarter earnings season off to a rocky start Friday, posting a decline in earnings per share and leading hospital stocks to a down day on Wall Street.
The system's shares never recovered from an early sell-off after the company announced Friday morning a first-quarter decline in adjusted earnings per share to 87 cents compared with $1.00 per diluted share in the year-earlier quarter. LifePoint share closed down $5.57, or 8%, to $67.56.
That was the worst of a general decline among hospital stocks. Community Health Systems shares lost 88 cents Friday to close down 4% to $19.08. Shares of Tenet Healthcare and HCA Holdings also gave up about 2% each.
LifePoint CEO William Carpenter said in an earnings call Friday morning that the company's admissions on a same-hospital basis fell 5.3% in the first quarter vs. a year ago caused, in part, by a light flu season.
The poor flu comparables carried over from the fourth quarter and hospitals reported experiencing the drop across the country.
Brentwood, Tenn.-based LifePoint booked a $24.7 million charge in the first quarter to settle lawsuits stemming from two cardiologists at its hospitals who were reportedly performing questionable invasive heart procedures. Carpenter said LifePoint self-reported the incidences to authorities and patients who may have been affected. That gave rise to malpractice lawsuits, he said.
LifePoint said it is settling the lawsuits for $41.9 million, with an insurance recovery of $17.2 million. The net expense of $24.7 million represents a loss of 35 cents per diluted share.
Quarter revenue at LifePoint grew to $1.5 billion from $1.26 billion in the year-ago quarter. Carpenter said financial results were in line with company expectations.
LifePoint also absorbed two hospitals in Columbia, S.C. that are expected to see their margins rise from break-even or low single-digits to double-digit margins over the next three years, said CFO Leif Murphy.
The company owns and operates 60 acute-care hospitals in more than 20 states.