HealthSouth Posts Drop In Q1 Profit, But Revenue Beats Estimates

reported a drop in its earnings for the first quarter on Thursday. The Birmingham, Alabama-based company reported a quarterly profit of $42.5 million, versus a year-ago profit of $46.7 million. On a per-share basis, the company's earnings from continuing operations declined to $0.44 per share from $0.48 per share. The latest quarter results included litigation-related expenses of $8 million. Its net operating revenue rose 25.3 percent to $740.6 million. However, analysts were projecting a profit of $0.56 per share on revenue of $731.3 million. Provisions for doubtful accounts increased to $11.6 million from $7.5 million. Net operating revenue for its inpatient rehabilitation segment rose 7.8 percent to $630.3 million. Patient discharges climbed 6.8 percent, while net patient revenue per discharge surged 1.8 percent. Net operating revenue for its home-health and hospice business came in at $110.3 million. Adjusted EBITDA for the first quarter climbed to $156.1 million from $144.1 million. "We are off to a very solid start in 2015," said Jay Grinney, President and Chief Executive Officer of HealthSouth. "Net operating revenues grew 25.3% from both the acquisition of Encompass Home Health and Hospice and strong discharge growth in our inpatient rehabilitation hospitals. We are reaffirming our full-year guidance despite the incurrence of atypical litigation charges in the quarter and a higher than anticipated increase in bad debt." For FY15, the company expects earnings of $2.13 to $2.19 per share. HealthSouth shares fell 5.38 percent to close at $45.22 yesterday.