Integrated Health Services has slight earnings decline Quarter 'a smidgen better' than one analyst expected

April 24, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

Despite sharply higher revenues, Integrated Health Services yesterday reported flat first-quarter earnings.

The Owings Mills-based company said earnings were $13.8 million, or 61 cents per share, compared with $14.1 million, or 60 cents a share, in the corresponding period a year ago when there were more shares outstanding.

IHS reported that revenues grew 19 percent, to $327.6 million, from $275 million in the comparable period last year.

Marc B. Levin, executive vice president, said earnings were down because of the cancellation of one major contract and because "we expanded some business lines with a lower margin initially."

Nonetheless, the per-share earnings exceeded Wall Street projections, which had been for about 55 cents a share.

Integrated offers a variety of "post-acute" health services for patients who have left hospitals, including nursing care, inpatient and outpatient rehabilitation and home care.

Integrated stock closed yesterday at $27.875, up 50 cents. That marked a 1996 high, and a jump of 39 percent from the 52-week low of $20.125 on March 21.

"Their numbers are a smidgen better than I thought they'd be," said Joel M. Ray, an analyst for Wheat First Butcher Singer in Richmond, Va.

More important than the quarterly earnings, he said, are "the moves the company is making to reposition itself," including acquisitions in home health care and efforts to concentrate on "capitated" contracts with managed-care insurers, in which Integrated would be paid a flat fee per person rather than bill for services.

"During the quarter, we added over 30 contracts with managed-care organizations," said Dr. Robert N. Elkins, chairman and chief executive officer of Integrated, "and believe we have the largest number of contracts with managed-care organizations of any company in the post-acute sector."

Pub Date: 4/24/96

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