LifePoint beats big in Q4

Rockdale acquisition boosts company growth

LifePoint Hospitals released fourth-quarter 2009 financial results today, beating expectations by 11 cents per share.

The Brentwood hospital company’s revenue was up more than 10 percent in Q4 to about $747 million. Net income rose to $38 million, compared to $28 million in the year-ago quarter, with earnings per diluted share jumping to 71 cents per share from 58 cents per diluted share.

On average, analysts had predicted 60 cents per share from LifePoint in the quarter. The company's stock (Ticker: LPNT) was trading up more than 4 percent Friday.

For the full year, revenues reached $3 billion, up 9.7 percent from 2008. Income was $139 million, or $2.59 per diluted share. The Street predicted EPS of $2.47 for the full year.

On this morning’s conference call, LifePoint COO David Dill credited the company’s performance to good top-line growth and solid cost controls. Salaries and benefits and other operating expenses decreased as a percentage of revenue in the quarter, though supply expenses were up slightly.

The acquisition of Rockdale Medical Center in Georgia was credited with $33 million in revenue growth during the fourth quarter. Factoring in the 138-bed facility created a 1.9 percent increase in fourth-quarter admissions on a continuing operations basis — but same-facility admissions continued to bleed, dropping 2.8 percent in the quarter.

Though the inpatient admissions fall is a slight improvement over Q3’s 3.7 percent admissions slide, LifePoint President and CEO Bill Carpenter said he’s “still not satisfied” with the 2.8 percent decline. He said he expects physician recruitment efforts and service line expansions will help the company “break through to positive territory at some point in the future.”

The company added a net 143 physicians during 2009, its best recruiting year ever.

Also of note is the 147 percent jump in cash and cash equivalents on the company’s balance sheet at the end of 2009, totaling $187 million. The company expects capital expenditures of $170 million to $180 million in 2010, with a shift from equipment purchases to more information technology spending.

Finally, on acquisitions, Carpenter said the company is shopping around, with an eye toward larger facilities. “We believe that there are opportunities for hospitals that look like Rockdale, a little bit larger facilities that can benefit from LifePoint’s scale and management capabilities,” he said. Specifically, the company is looking for these larger hospitals in growing communities with “favorable demographics.”

But the company has factored in zero acquisitions to its 2010 guidance and, on the low end of the range, accounted for the possibility of increasing bad debt and Medicaid payment reductions in some of its markets.

LifePoint predicts net revenue between $3.1 billion and $3.2 billion, with earnings per share of $2.50 to $2.80.