Kindred Turns 3Q Profit, But Outlook Sinks Shares

LOUISVILLE, Ky. (AP) — Health care services company Kindred Healthcare Inc. said Monday it turned a better-than-expected profit in the third quarter, compared with a year-ago period in which it lost money after closing a hospital.

Kindred also raised its 2009 profit forecast, but expressed concern about the effects that lower Medicare and Medicaid reimbursement rates could have on its nursing center business next year, sending shares tumbling in after-hours trading.

Kindred said it earned $5.5 million, or 14 cents per share, compared with a loss of $21.3 million, or 54 cents per share a year ago. The most recent quarter included a tax gain of 4 cents per share. One year ago, Kindred booked a $22.1 million charge after closing a hospital, and said its results were hurt by shorter stays by patients, higher costs, and hurricanes in the Gulf region. Excluding one-time items, Kindred said it earned 5 cents per share in the 2008 period.

Revenue picked up 6 percent to $1.06 billion from $997.1 million, with growth seen across all divisions. The company said results were helped by growth in non-government admissions and favorable commercial pricing.