Skilled Healthcare profit grows, but outlook pared

FOOTHILL RANCH, Calif. (AP) — Skilled Healthcare Group Inc. said Tuesday its profit grew 6 percent in the third quarter, but the nursing facility operator lowered its revenue estimate for the year, sending its shares tumbling.

Skilled Healthcare said its profit rose to $9.1 million, or 24 cents per share, from $8.6 million, or 23 cents per share, in the third quarter of 2008. Revenue rose 3 percent, to $188.4 million from $182.5 million, due to better results from its long-term care services business.

According to Thomson Reuters, analysts were expecting a profit of 22 cents per share and revenue of $192.6 million.

During the quarter, long-term care revenue rose 4 percent to $166.2 million, and ancillary service revenue grew 10 percent to $19.1 million.

The company said its hospice business went over its Medicare cap by $2.1 million in the third quarter due to marketing difficulties, longer stays by patients, service improvement efforts and a hold on admissions until the service improvement initiatives were in place.

Skilled Healthcare also said it expects a 1 percent cut in Medicare payment rates in the fourth quarter.

For the full year, the company tightened its profit forecast. Itnow expects to earn 98 cents to $1.01 per share, compared with 95 cents to $1.01 per share earlier in the year. But it cut its revenue outlook to $763 million and $767 million in revenue, down from $765 million to $775 million.

Analysts expect a profit of 98 cents per share and $763.9 million in revenue. In afternoon trading, Skilled Healthcare stock lost 75 cents, or 9.3 percent, to $7.31.