HealthSouth profit falls, but beats expectations

BIRMINGHAM, Ala. -- Hospital operator HealthSouth Corp. reported a smaller third-quarter profit Thursday as expenses increased, though company results still beat Wall Street expectations.

HealthSouth said revenue increased 7.9 percent to $537 million as the company treated 4.2 percent more patients in the quarter. HealthSouth operates rehabilitation hospitals in 27 states and Puerto Rico.

The company reported a one-time $4.9 million gain after renegotiating its joint venture agreement with St. Vincent Rehabilitation Hospital. But that gain was offset by higher expenses, including a $17 million increase in salary and benefits.

The company reported net income of $41.4 million, or 44 cents per share, compared with $50.5 million, or 54 cents per share, in the third quarter of 2011.

Analysts polled by FactSet expected earnings per share of 34 cents on revenue of $523.4 million.

Based on the results, company executives increased their full-year earnings guidance to between $1.49 and $1.53 per share from $1.45 to $1.50. Analysts are expecting $1.52 a share.