Psychiatric Solutions Inc.'s (PSYS) third-quarter profit surged
88% on sharply higher margins.
The behavioral health programs provider is set to be bought by
hospital company Universal Health Services Inc. (UHS) for $2
billion cash and the assumption of $1.1 billion in debt. The deal
comes as part of Psychiatric Solutions' business is managing
psychiatric units for other hospitals and government agencies. It
specializes in treating children with behavioral or mental
illnesses.
Psychiatric Solutions posted a profit of $52.9 million, or 92
cents a share, up from $28.2 million, or 50 cents a share, a year
earlier. The latest quarter included a 2-cent loss from
discontinued operations. Revenue increased 12% to $508.5 million
and it rose 10% on a same-facility basis.
Analysts polled by Thomson Reuters had estimated earnings of 59
cents on revenue of $487 million.
Operating margin surged to 17.1% from 10.1% as operating costs
rose just 3.5%.
Total admissions rose 8.2% and revenue patient per day increased
6.1%.
Shares of Psychiatric Solutions closed at $33.61. The takeover
price is $33.75.
-By Yogita Patel and Kevin Kingsbury, Dow Jones Newswires;
212-416-2262; yogita.patel@dowjones.com