Hospital stocks rallied Tuesday following announcements by Triad Hospitals and LifePoint Hospitals of earnings that were higher than expected. News of their earnings boosted hospital stock prices an average 7.6% today.
Triad, the HCA spin-off that owns 49 hospitals and 14 outpatient surgery centers, saw its stock rise by about 10% today after announcing a 16% increase in second quarter profits. The Texas company attributed the increase to more inpatient surgeries, resulting from its “physician leadership groups” that build ties with doctors.
More hospitals and overall better performance were the reasons LifePoint, which operates 28 general acute care hospitals, cited for its 25% increase in revenue this year.
Another factor that may have led to some of the strength in hospital shares is The Wall Street Journal's “Ahead of the Tape” column that listed healthcare stocks such as Triad and HCA as attractive for long-term investors.
At the close of trading Tuesday, hospital stocks settled as follow: Community Health Systems, +$1.76, or 8.9%, to $21.56; HCA +$1.29, or 3.5%, to $35.81; LifePoint Hospitals +$2.91, or 11.7%, to $27.65; Province Healthcare +80 cents, or 6.6%, to $13. And for non-Nashville-based hospital stocks: Triad Hospitals +$1.93, or 6.8%, to $30.46; Tenet Healthcare +42 cents, or 3.2%, to $13.70, Health Management +96 cents, or 4.9%, to $20.55; and Universal Health Services +$2.65, or 5.4%, to $51.75.
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