HealthSouth 3Q earnings slide on year-earlier gain

BIRMINGHAM, Ala. - HealthSouth Corp., a provider of inpatient rehabilitation services, said Tuesday its net income plummeted in the third quarter as the year-earlier period benefited from a substantial gain.

Net income for the quarter ended in September slid to $100,000, or less than a penny per share, from $281.1 million, or $3.13 per share, a year ago. The 2007 quarter includes a tax benefit of $281.2 million as well as $40.4 million in gains related to asset sales.

On an adjusted basis, income from continuing operations improved to $14.7 million, or 15 cents per share, from a loss of $6.5 million, or 7 cents per share, a year ago.

Net operating revenue rose 6.5 percent to $456.2 million from $428.3 million. HealthSouth said the improvement was driven by 9.3 percent higher discharge volumes, offset slightly by lower revenue per discharge and lower outpatient and other revenues.

On average, analysts surveyed by Thomson Reuters forecast a quarterly profit of 7 cents per share on revenue of $450.7 million.

Debt outstanding as of Oct. 31 was $1.8 billion, reflecting a $208 million reduction in debt since the start of the year.

Based partly on its lower debt, HealthSouth forecast that 2008 earnings would be better than it had previously forecast.

Shares of the company rose $1.23, or 10 percent, to $13.50 in late trading. The stock ended regular trading down 79 cents at $12.27.

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