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Thread: HealthSouth profits, patient flows rise

  1. #1

    HealthSouth profits, patient flows rise

    HealthSouth profits, patient flows rise

    By Edward Tobin

    NEW YORK, March 12 (Reuters) - HealthSouth Corp. <HRC.N> on Tuesday reported a 15 percent rise in fourth-quarter earnings as the provider of outpatient surgery, diagnostic imaging and rehabilitation health-care services saw more patients and received higher payments from them.

    The Birmingham, Alabama-based company said earnings before special items increased to $88.6 million, or 22 cents per share, from $76.9 million, or 19 cents a share, a year earlier. The results met the analysts' average estimate compiled by Thomson Financial/First Call.

    In the latest quarter, HealthSouth took charges of $11.4 million for the sale of its United Kingdom diagnostic centers and four rehabilitation hospitals and $9.3 million on the sale of certain properties in a sale-leaseback transaction. After those charges, net income was $67.9 million, or 17 cents per diluted share.

    Quarterly revenue rose slightly to $1.12 billion from $1.08 billion a year ago.

    "It looks like the core business continues to trend slightly better than I expected," said analyst Gary Taylor of Banc of America Securities.

    HealthSouth shares closed down 15 cents, or 1.2 percent, to $12.70 on the New York Stock Exchange after rising as high as $13.30 in the session.

    "The numbers in the quarter were almost perfectly in line with what I looked for," Taylor said. "But the market is focused more on what HealthSouth is saying it can do in the next quarter and the impact of the recent Medicare reimbursement change."

    Effective Jan. 1, the government insurance plan for senior citizens and the disabled changed its reimbursement plan for inpatient rehabilitation hospitals to a prospective payment system that sets uniform rates across the United States. As a result, those hospitals can make a profit on their Medicare business if their costs fall below those rates.

    Previously, Medicare reimbursed hospitals with a percentage of their actual costs.

    HealthSouth's inpatient rehabilitation unit, which accounts for 40 percent of its of business, gets a high percentage of its business from Medicare patients.

    The company said in the earnings release that early experience under the payment system "is confirming our expectations for the positive impact that PPS will have on our business."

    Banc of America's Taylor said he is "convinced that by some magnitude, HealthSouth's costs are lower than the national average. So there should be some positive benefit to the change."

    16:13 03-12-02

  2. #2
    Senior Member Max's Avatar
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    NYSE Halts HealthSouth Trading Again

    NYSE Halts HealthSouth Trading Again
    Sat Mar 22, 2:59 AM ET Add Health - AP to My Yahoo!

    By JAY REEVES, Associated Press Writer

    BIRMINGHAM, Ala. - The New York Stock Exchange (news - web sites) halted trading in HealthSouth Corp. for a third day Friday as it considered whether to quit listing the rehabilitation services company that has been accused of massive accounting fraud.

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    The exchange said trading "may or may not resume," depending on the outcome of a review. A spokeswoman for the exchange, Robin Verhose, declined comment on when trading might continue.

    HealthSouth, meanwhile, issued a statement trying to reassure investors, employees and creditors it could continue doing business despite government charges earlier this week that it overstated earnings by $1.4 billion since 1999.

    The company already has suspended chairman and chief executive Richard Scrushy and William T. Owens, its chief financial officer.

    Acting at the request of the Securities and Exchange Commission (news - web sites), a court on Thursday froze Scrushy's assets and ordered HealthSouth to place any "extraordinary payments" to executives or employees in escrow.

    "The court order does not in any way restrict HealthSouth from continuing to conduct its business in the ordinary course, which the company is continuing to do while cooperating fully with all ongoing investigations," the company said.

    The SEC filed suit Wednesday claiming HealthSouth accountants acting at Scrushy's direction had overstated earnings since the company went public in 1986 to create the false impression it was meeting Wall Street expectations.

    Scrushy's attorney William Clark said his client and HealthSouth have cooperated with the SEC and that Scrushy "was shocked and surprised at the unexpected actions taken by the government."

    Analysts for 11 major brokerages have downgraded HealthSouth's stock, which has fallen to $3.91 a share from a high of about $30 five years ago, and banks have frozen a $1.25 billion credit line.

    UBS Warburg estimated HealthSouth has drawn about $650 million of the credit line so far. HealthSouth bonds plummeted more than 20 points before trading was halted Thursday, the firm said.

    HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitation services. It has about 50,000 employees and 1,700 facilities in all 50 states and abroad.

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