Manor Care

(HCR) - Get Report

said earnings for the second quarter will be lower than current analysts' estimates, primarily as a result of weaker-than-expected occupancy during the last part of the quarter.

Shares of the owner of long-term care centers skidded $2.62, or 7%, to $37.14.

Occupancy in Manor Care's skilled nursing facilities dropped more than 1% from the near-record level of the first quarter, and cost-management programs couldn't offset the revenue reduction. The company also said it had a number of unusual items during the quarter, totaling about 4 cents to 5 cents a share, including higher-than-normal stock-based compensation costs.

However, even after adjusting for the abnormal expenses, the unanticipated revenue slowdown hurt the company's quarterly financial results. In addition, average Medicaid rates showed little improvement from the first quarter.

As a result, the company estimates that reported earnings in the quarter, including the unusual items, will be 41 cents to 43 cents a share. Manor Care plans to release second-quarter earnings on July 22.