Reuters: Global Markets: LHC Group shares rise as cost cuts help profitability

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LHC Group shares rise as cost cuts help profitability May 3rd 2012, 17:19 Thu May 3, 2012 1:19pm EDT (Reuters) - Shares in LHC Group (LHCG.O) rose as much as 13 percent on Thursday as it posted a larger-than-expected quarterly profit on reduced overheads, pointing to signs of a rebound in the beleaguered home healthcare sector. Providers of home health nursing, including Gentiva Health Services (GTIV.O), Amedisys (AMED.O) and Almost Family (AFAM.O), had a tumultuous 2011 due to the uncertainty surrounding Medicare reimbursement cuts. Accordingly, analysts had withdrawn their bullish estimates on these companies. Some of this uncertainty was lifted in October, when the Centers for Medicare and Medicaid Services finalized a 2.31 percent cut in Medicare payments to home health agencies for 2012. While the rate cuts ate into LHC's revenue, it managed to hold profits steady as it benefited from cost control measures and a rise in patient admissions. Almost Family posted earnings ahead of Wall Street expectations on Wednesday, while Gentiva reported a 63 percent drop in profit due to costs associated with federal investigations into its billing practices. Almost Family's personal care segment revenue jumped 94 percent, helped by its acquisition of Cambridge Home Health Care Holdings Inc. Amedisys, which is also under investigation, is due to report its quarterly results on Tuesday. Both Gentiva and LHC remained cautious about the impact of the reimbursement cuts on the rest of the year. LHC shares were up 11 percent at $19.00 on Thursday afternoon, while those of Gentiva were down 6 percent at $7.70 on the Nasdaq. Almost Family shares were up 2 percent at $25.01. (Reporting by Zeba Siddiqui in Bangalore; Editing by Roshni Menon) Link this Share this Digg this Email Reprints

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