Bumper Q2 for LifePoint

Reform, acquisitions help operating margins climb to 4%

LifePoint Hospitals posted a second-quarter profit of $39.1 million, an increase of 43 percent from 2013 that blew away analysts' expectations. Per diluted share, net income was 84 cents versus 57 cents from the same time a year ago and the Street's 55 cents.

Total revenues at Brentwood-based LifePoint climbed 16 percent to $1.25 billion but — in another sign that health care reform is boosting hospitals' bottom lines — the company's provision for doubtful accounts rose just 10 percent to $200 million. Operating margins jumped a full point year over year to 4.0 percent as same-store equivalent admissions rose 2.0 percent and the five hospitals acquired over the past year also chipped in.

The Q2 report led Chairman and CEO Bill Carpenter and his team to raise LifePoint's guidance for the rest of this year. They now see LifePoint generating adjusted EBITDA of between $605 million and $620 million and earnings per diluted share of $2.99 to $3.19. Before this morning's report, the analyst consensus for 2014 EPS stood at $2.71.

“Our results reflect improving margins, enhancements to patient safety and quality of care, the strength of our recent acquisitions, and our successful efforts to capture the benefits of expanded coverage under healthcare reform,” Carpenter said. “I want to thank our physician leaders and the thousands of LifePoint employees who work hard every day to make our ongoing success possible.”

Shares of LifePoint (Ticker: LPNT) closed Thursday at $65.49, just shy of the all-time high they recently hit. So far this year, they're up 24 percent.