Inpatient volume figure dogs Province Healthcare, stock falls 13%

Shares of Brentwood-based Province Healthcare (PRHC) fell 13 percent Tuesday morning after analysts questioned the company’s slightly

Shares of Brentwood-based Province Healthcare (PRHC) fell 13 percent Tuesday morning after analysts questioned the company’s slightly weaker volume on an adjusted, same-store basis for fourth quarter 2001 during a conference call earlier in the day. Concerns raised by Province’s report spread to other hospital stocks, including LifePoint Hospitals (LPNT), whose shares slipped as much as 10%.

Province acquired five hospitals in the late third and fourth quarter of 2001. Those facilities were not included in yearend and fourth quarter results.

The company earned $9.8 million, or 30 cents per share, on revenues of $153 million in fourth quarter 2001. For the comparable year-to-date period, Province made $3.8 million, or 11 cents per share, on revenues of $123 million. The year-earlier figures for net income and earnings per share include a 12 cent per-share loss from the sale of two hospitals and one office building.

Also for the fourth quarter, same-store hospital net patient revenue climbed 10.5 percent, thanks to better pricing. Same-store admissions rose just 0.2 percent and outpatient revenues rose 14.2 percent. Province excluded from its same-store results five acquisitions made in the fourth quarter, so the figures are based on 14 hospitals. Those acquisitions include Selma Baptist Hospital and Vaughn Regional Medical Center in Selma, Ala., Ashland Regional Medical Center in Ashland, Penn., Medical Center of Southern Indiana in Charlestown, Ind., and Lakewood Medical Center in Morgan City, La.

On an adjusted basis for the year ended Dec. 31, 2001, Province made $32.9 million, or $1.01 per share, on revenues of $531 million. EBITDA (earnings before interest, taxes, depreciation and amortization) rose 18 percent to $99.5 million for the year. There were 9 percent more diluted shares outstanding in 2001 compared to the previous year.

Chief executive Marty Rash said Tuesday that the company is positioned to meet its goals of two to four acquisitions per year and a 25 percent EPS growth rate annually. Province expects to grow 2002 earnings by 36 percent, driven by revenue growth at hospitals open at least a year. Also, the company expects earnings of 35 cents per share in first quarter 2002, 33 cents per share in second quarter, 29 cents in the third quarter, and 40 cents per share in the fourth quarter. Those estimates include the benefits of a federal change in accounting standards.

Province shares were off $3.66, or 11%, to $29.19 in afternoon trading that was six-times as heavy as the daily average.