HealthSouth Corp. expects earnings and revenue to fall short of Wall Street expectations next year as it takes into account current Medicare reimbursement policies for outpatient physical-therapy services.
The nation’s largest operator of rehabilitation centers, which is currently the focus of a Securities and Exchange Commission probe, said Monday that it expects 2003 earnings excluding charges or other items of between 55 cents and 57 cents a share, on revenue of $4.23 billion to $4.32 billion.
Analysts’ latest forecasts put earnings at about 61 cents a share for 2003, with revenue of around $4.57 billion, according to a survey by Thomson First Call. In 2001, HealthSouth posted earnings excluding items of $326.1 million, or 82 cents a share, on revenue of $4.38 billion.
The company said it expects earnings before interest, taxes, depreciation and amortization, or Ebitda, of $1.05 billion to $1.09 billion next year, while capital expenditures should range from $375 million to $425 million.
In late August, the company said a change in Medicare billing, issued May 17 and effective July 1, would reduce annual Ebitda by $175 million. The change lowered Medicare reimbursements for outpatient services. A few weeks later, the SEC began investigating HealthSouth’s accounting issues and stock trading related to announcements that had sent the company’s stock sharply lower.
On a quarterly basis, HealthSouth said it expects earnings of about 13 cents a share for the 2003 first quarter, 14 cents to 15 cents a share for the second quarter, 14 cents a share for the third period and about 14 cents to 15 cents a share for the fourth.
Analysts expect earnings of about 13 cents a share for the first quarter, 15 cents a share for the second and third quarters and 16 cents a share for the fourth quarter, according to First Call.
Last month, HealthSouth said it would cut up to 2% of its work force, or about 1,000 of its roughly 51,000 employees, to reduce costs. The company has said that the job cuts are in response to a change in Medicare policies.