Sunrise Senior Living, a senior living chain exploring a possible sale, on Friday posted disappointing revenue under management, sending shares down 4 percent.

The company, which is the subject of a government probe into insider trading, stock options and accounting, as expected, did not report full second-quarter results as its financials are still under review. The company is in the midst of restating results for 2003 through 2005.

Sunrise, the biggest U.S. owner of assisted-living facilities, posted selected preliminary results, including an 8.2 percent increase in revenue under management to $581.9 million.

Jefferies analyst Frank Morgan said in a research report that results fell short, noting that expenses grew faster than revenues. In communities owned for more than a year, expenses grew 6.3 percent, while same-community revenue rose only 5.3 percent.

At the end of the quarter, Sunrise said it had $210 million in cash and cash equivalents and about $115 million in debt, excluding the impact of consolidation of certain ventures that could arise from its accounting review.

Because the company's restatement of its financial statements has not been completed, Sunrise is unable at this time to provide a reasonable estimate of either its second-quarter 2007 or second-quarter 2006 results of operations, the company said in a press release.

The McLean, Virginia-based company, which has been under investigation by U.S. regulators, has not reported full financial results since 2005.

In May, the U.S. Securities and Exchange Commission opened a formal probe into insider stock sales at the company, the timing of stock option grants and historical accounting.

Sunrise, which is still led by founder Paul Klaassen, said it is cooperating with that probe.

In June, hedge fund Millennium Partners LP called on the board to sell, merge or restructure the McLean, Virginia-based company, or to find new management.

Sunrise chose Citigroup Global Markets as a financial adviser in July to explore its strategic alternatives.

Deal making has been swift in the health care sector since last year's $22 billion management-led leverage buyout of No. 1 hospitals group HCA Inc. As with many of these deals, the value of the real estate is key, analysts have said.

The company owns more than 450 assisted-living centers for seniors, mostly in the United States, but also in Canada, Germany and Britain.

Other big players in the sector include Brookdale Senior Living Inc. and Capital Senior Living Corp. .

Shares of Sunrise fell $1.31, or 2.9 percent, to $37.84 on in mid-morning trading on the New York Stock Exchange. They have traded in a range between $42.97 and $27.25 during the past year.