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Psychiatric Solutions, Inc.
Franklin, Tennessee
October 29, 2009 AP
Shares of Psychiatric Solutions Inc. plunged nearly 23 percent on
Wednesday, a day after the behavioral hospital operator reported
disappointing results for the third quarter and cut its expectations for
the rest of 2009. The Franklin-based firm's stock dropped $5.47 to close at
$18.67 per share in Nasdaq trading. Psychiatric
Solutions said profits haven't lived up to the company's own goals and
revenue per patient per day hasn't grown as much as expected. Profits at
its management-contract segment did not meet its forecasts either. In a
note to clients, Raymond James analyst John Ransom downgraded the stock to
"market perform" from "strong buy." He said tight state
budgets and uncertainty about future profits probably will pressure Psychiatric
Solutions' stock over the next few months. Psychiatric Solution reported
third-quarter net income attributable to its stockholders of $28.2 million,
or 50 cents per share, on revenue of $455.3 million. Analysts surveyed by
Thomson Reuters had expected profits of 56 cents per share on revenue of
$462.2 million. The company this year expects to earn $2.11 to $2.14 per
share, down from a previous forecast of $2.16 to $2.24 per share. In other
health-care related earnings Wednesday: • Community Health Systems Inc.
reported third-quarter net income of $59.7 million, up 18.5 percent from
$50.4 million a year earlier. Per share results of 65 cents for the recent
quarter beat the average forecast of analysts surveyed by Thomson Reuters
by 3 cents. Revenues rose 12 percent to $3.09 billion, better than the
$3.02 billion that analysts had forecast. For all of next year, the
Franklin-based hospital chain expects profits of $2.80 to $3 per share. •
America Service Group in Brentwood lowered its full-year earnings forecast
to 65 cents a share from 88 cents, citing the effects of large inmate
medical claims in Michigan in the third quarter and unrelated litigation
costs. But the prison health-care provider still more than doubled its net
income in the third quarter. Net income rose to $716,000 from $348,000 a
year ago.
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