Rehab services provider HealthSouth Corp,. has reported a dramatic drop in net income of $6.6 million, or less than a penny a share for Q3 compared to $267.6 million, or $3.13 a share, for the same period last year. Revenue for the quarter was up 6.5 percent to $456.2 million. However, the company has forecast an increase in revenue for the year to $1.88 billion up from $1.83 billion for 2007.
The company attributed the disappointing net income to a $17.1 million charge related to its securities litigation with UBS Securities and ongoing debt reduction efforts. Last month the company paid down $208 million in debt. Analysts are encouraged by the company's strong cash flow and debt reduction. Avondale Partners raised its rating on HealthSouth to market outperform from market perform last month.