HCA Inc.'s third-quarter profit rose 47% as the biggest U.S. hospital chain attracted more patients and raised the prices it charges managed-care insurers.
Net income rose to $256 million, or 48 cents a share, from $174 million, or 31 cents, a year earlier, the company said.
Revenue rose 8.4% to $4.44 billion. Some investors were disappointed that profit only matched analysts' estimates, sending HCA's shares down 5.7%.
HCA has poured money into emergency rooms and profitable medical services such as cardiology and neurology. Chief Executive Jack Bovender Jr. also has negotiated higher rates with insurers, reversing a price-cutting strategy in the 1990s, when HCA sought a bigger market share.
"There's probably a growing concern about the sector's ability to continue the string of upside earnings surprises they've had," said Frank Morgan, a Jefferies & Co. analyst.
Fears about HCA's profit margins sent the company's shares down $2.36 to $38.74 on the New York Stock Exchange. Rival Tenet Healthcare Corp. fell $2.01 to $58.79 on the NYSE.
HCA said profit would have been $209 million, or 40 cents a share, compared with $186 million, or 33 cents, a year ago after gains on the sale of hospitals, expenses for impairment of assets and costs related to restructuring and a U.S. government fraud investigation. Those results matched the 40-cent average estimate of analysts surveyed by Thomson Financial/First Call.
Third-quarter admissions increased 2.6% at hospitals HCA owned at least a year. Revenue at those hospitals grew 10.8%, and revenue per admission rose 8.3%, an indication that HCA is raising prices in contracts with insurers.
HCA joins No. 2 hospital company Tenet Healthcare, Universal Health Services Inc., Health Management Associates Inc. and LifePoint Hospitals Inc. in reporting higher profit for the quarter.
Other earnings, excluding one-time gains and charges unless noted:
* DuPont Co. said third-quarter net income fell to $142 million, or 13 cents a share, from $562 million, or 53 cents, a year earlier. Revenue fell 13% to $5.6 billion as sales fell for nylon, plastics and other materials used in cars, construction and clothing. Wilmington, Del.-based DuPont said it expects earnings per share of about 12 cents in the fourth quarter, lower than the 17-cent average estimate.
* Honeywell International Inc. reported a loss of $308 million in the third quarter, or 38 cents a share, contrasted with net income of $282 million, or 35 cents, a year ago. Sales fell 6.9% to $5.8 billion. Honeywell is paring 19,900 jobs this year and next as it copes with lower sales of aerospace parts and services.
Excluding reorganization costs of $668 million, Honeywell would have had a third-quarter profit of $360 million, or 44 cents, matching analyst estimates. The Morris Township, N.J.-based company expects fourth-quarter profit of 54 cents to 56 cents a share.
* Phillips Petroleum Co. said third-quarter net income fell to $364 million, or $1.30 a share, from $426 million, or $1.66, a year earlier. Revenue rose 8.8% to $6.2 billion.
The results included $14 million in costs related to a chemical joint venture, work force cuts and early retirement of debt, the Bartlesville, Okla.-based company said. Those costs were partly offset by a gain on asset sales. Without those items, profit would have been $378 million, or $1.35 a share.