Health Management Associates ( HMA) may need a more potent formula for success. The rural hospital operator -- long a favorite on Wall Street -- has failed to please investors with its normal mix of in-line earnings and low bad-debt expense. The company posted third-quarter profits of 36 cents a share to extend a year-long trend of matching consensus expectations exactly. It also reported a bad-debt ratio of 7.6% that, while higher than both last year and last quarter, remains well below the double-digit rates posted by many others in the industry. Still, HMA's stock took a slight hit, falling 1.5% to $21.38 Tuesday, as investors chose to focus on the apparent side effects of the company's acquisition-dependent growth strategy. For its third quarter ended June 30, HMA posted net income of $89.3 million, or 36 cents a share. That's up from the year-ago $75.9 million, or 30 cents a share. HMA's total revenue -- even lifted by new hospitals -- fell short of expectations. It jumped 26.3%, down from 29% just last quarter, to hit $817.3 million. Wall Street was expecting $820.8 million. Meanwhile, HMA's "industry-leading" profit margins have stopped growing at all. They fell from 26.6% a year ago -- when they were expanding -- to 23.3% in the latest period. And those margins haven't taken the same hit from bad-debt expense that some others in the industry have. HMA has managed to keep its bad debt stable, in part by aggressively classifying the accounts of some uninsured patients as charity care instead. By doing so, the company never recognizes revenue from the accounts -- writing it off upfront instead -- so it faces no bad-debt hit to its margins when the accounts go unpaid down the road. Regardless of such classifications, however, HMA is still providing a significant amount of uncompensated care. In the latest quarter, the company wrote off $106 million worth of charity and indigent care -- 54% more than it did just one year ago -- at a time when its bad-debt expense keeps climbing as well.