MedCath's 4th-qtr profit falls on higher expenses

For the period ended Sept. 30, the company earned $721,000, or 4 cents per share, compared with profit of $908,000, or 4 cents per share, a year ago. Analysts polled by Thomson Reuters expected profit of 27 cents per share.

Revenue rose 4 percent to $150.9 million.

Income from continuing operations fell to 2 cents per share from 11 cents per share.

"During the fourth quarter we experienced an increase in drug-eluting stent and certain surgery volumes," said President and Chief Executive Ed French, in a statement Thursday. "Despite these improved volumes, we were challenged by higher operating expense, especially uncompensated care expense."

During the quarter, uncompensated care was 10.4 percent of revenue, compared with 7.4 percent last year. Uncompensated care includes charity care and bad debt, which is the amount of debt a hospital incurs from treating uninsured or underinsured patients and has been unable to collect.

French expects the weak economy to continue posing a challenge to the company. Meanwhile, MedCath will no longer provide guidance.

"The decision to end this practice is based on management's belief that its actual performance and the successful execution of its long-term strategy are the best measures of the company's value," MedCath said, in a statement.

For the full year, the profit nearly doubled to $21.2 million, or $1.06 per share, on lower charges, compared with profit of $11.5 million, or 54 cents per share, in fiscal 2007. Revenue fell to $614 million from $660.6 million.

MedCath also said it completed a three-year credit deal for $160 million. It will use the loan to repurchase senior notes.