Shares of RehabCare Group Inc. skidded Wednesday after the physical therapy services company reported fourth-quarter profit below Wall Street estimates.
Late Tuesday, RehabCare said its quarterly profit decreased by 90 percent, primarily because of costs related to its purchase of acute care hospital operator Triumph Healthcare. RehabCare earned $655,000, or 3 cents per share, compared with $5.7 million, or 32 cents per share, in the same quarter a year earlier. The Triumph deal included charges that reduced RehabCare's profit by $7.2 million, or 34 cents per share.
Without those charges, the company earned 37 cents per share in the latest quarter.
Analysts were expecting profit of 42 cents per share, according to a Thomson Reuters survey. Analyst estimates typically exclude one-time items.
Quarterly revenue rose 33 percent to $254.7 million from $192.1 million. That exceeded the $248.3 million analysts anticipated.
In Wednesday afternoon trading, RehabCare stock declined $2.36, or 8.2 percent, to $26.22. The stock has ranged from $12.44 to $34.88 over the past year.
The $570 million Triumph deal closed in November. The acquisition gave RehabCare control of 20 hospitals in seven states, along with two more planned for early 2010.
In a note to clients, Morgan Keegan analyst Robert Mains wrote RehabCare's hospital division did not live up to expectations, and lost money during the quarter. But he said the hospital rehabilitation service and skilled nursing rehabilitation service businesses did better than he expected.
For the full year, RehabCare's profit rose 23 percent to $23 million, or $1.22 per share, from $18.7 million, or $1.05 per share, in 2008. Revenue increased 18 percent to $869.4 million from $735.4 million.