HealthSouth shares rise on 2Q results

Its stock advanced $1.27, or 7.4 percent, to $18.37 during midday trading. The stock has traded between $14.84 and $23.02 during the past 52 weeks.

Late Tuesday, the Birmingham-based company reported profit for the quarter ended June 30 plunged to $37.6 million, or 47 cents per share, from $461.8 million, or $5.87 per share, last year. Year-ago results include a hefty gain related to selling surgery centers and outpatient divisions. Excluding one-time items, the current quarters' adjusted income from continuing operations totaled $15.4 million, or 17 cents per share.

Revenue rose 5 percent to $461.4 million from $438.7 million last year.

Analysts polled by Thomson Financial predicted a profit of 7 cents per share on revenue of $456.8 million. Analysts estimates typically exclude one-time costs.

For 2008, the company now expects earnings of 15 cents to 20 cents per share, from previous guidance of a loss of 8 cents to break-even per share. Excluding one-time items, the company expects earnings of 50 cents to 55 cents per share, compared with its prior guidance of 30 cents to 38 cents per share.

Analysts expect an annual profit of 42 cents per share.

HealthSouth raised its revenue outlook to $1.825 billion to $1.875 billion, from previous guidance of $1.8 billion to $1.85 billion, while analysts expect sales of $1.82 billion.

HealthSouth said it expects to increase inpatient discharges year-over-year by 4 percent to 5 percent, to offset a Medicare pricing rollback.

"HealthSouth reported strong second-quarter results driven by robust discharge growth and continued good expense control," said SunTrust Robinson Humphrey analyst David MacDonald. "We remain bullish on HLS given improving financial flexibility and dominant market share."