posted lower first-quarter sales and earnings but matched Wall Street's expectations.
The Toledo, Ohio, hospice company made $27 million, or 33 cents a share, for the quarter ended March 31 before the effect of an accounting change. A year ago the company made $40.4 million, or 46 cents a share. Revenue fell to $869 million from $879 million a year earlier. The year-ago quarter benefited from $53 million in additional revenue due to retroactive Medicaid rate adjustments in Pennsylvania and other states.
The latest quarter was hit by 21 cents a share in charges, including 9 cents a share in asset impairment charges linked to the medical transcription business that Manor Care plans to exit and 12 cents a share in stock-based compensation costs, most of which is tied to pay expense related to the recent rise in the company's stock.
Excluding the charges, latest-quarter per-share earnings beat the 50-cent Thomson Financial target.
"During the quarter, our shift to more complex Medicare patients continued to have a positive effect on our average Medicare rates, helping to offset somewhat the Medicare rate decrease imposed at the beginning of the year," CEO Paul Ormond said.
"While our costs to care for many of these patients are much higher than the traditional long-term care resident, our success in repositioning our company in the post-acute market should provide us with many more opportunities for growth in the future. This focus in the 2006 first quarter led to continuing growth of our skilled nursing census, and record Quality Mix levels. Hospice growth remains strong, and we are pursuing several internal and external avenues for sustained growth. There are numerous opportunities to build on these successes, and we are optimistic that through our dedicated employees, we will sustain our progress."