Blue Rhino ( RINO) reported a jump in third-quarter profit, due in part to strength in its cylinder-exchange business.

The Winston-Salem, N.C.-based company earned $4.3 million, or 22 cents a share, in the quarter ended April 30, compared with $1.8 million, or 12 cents a share, in the prior-year period. Current results included a $2.5 million litigation settlement and debt-restructuring charges. Excluding these items, earnings were 14 cents a share, beating analysts' estimates by a penny.

Quarterly revenue was $59.9 million, up from last year's $58.9 million. The company said cylinder-exchange revenue increased 33% to $36.3 million. Product sales, however, decreased 26% to $23.6 million.

"We experienced continued improvement in cylinder-exchange revenues compared to the prior year, despite soft consumer spending and tough comps from the prior year's substantial growth during the same quarter," said Billy D. Prim, chief executive.

The company also said it successfully launched of its mosquito eradication appliance, SkeeterVac, during the quarter. Shares of the company were up 4% in morning trading at $15.23.

Looking to the fourth quarter, the company expects to earn 70 cents to 72 cents a share, excluding items, on revenue of $87 million to $92 million. Analysts expect 71 cents a share, on average. Including refinancing charges, Blue Rhino expects to earn 61 cents to 63 cents a share.

For the full year 2003, the company expects to earn 95 cents to 97 cents a share, including charges, and 96 cents to 98 cents a share, excluding charges. The analyst consensus is 97 cents a share. Revenue is expected to be $260 million to $265 million.

For the fiscal year ending July 31, 2004, the company said it expects pretax earnings growth of at least 20% and double-digit revenue growth in the core cylinder-exchange business. Analysts expect earnings of $1.23 a share on revenue of $316.5 million.

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