Hospital sale drove down HMA (NYSE: HMA) profits

Health Management Associates (NYSE: HMA) saw profits drop 17 percent in the last three months of 2010 compared with Q4 2009, the company announced this week. Yet, the Naples, Fla.-based hospital chain reported growth in adjusted earnings.

HMA reported a profit of $28.2 million, or 11 cents a share, down from $34.1 million, or 14 cents a share, a year earlier. The earnings shortfall is largely attributed to the $13.1 million loss on the sale of 140-bed Riley Hospital, in Meridian, Miss. As a result, HMA has been placed in discontinued operations and prior periods have been reclassified, said company officials.

After allowing for the reclassification, HMA's revenues increased 14.1 percent to $1.35 million, and income from continuing operations jumped 26 percent to $46.4 million.

The company said its "relentless focus" on controlling costs, physician recruitment and market service development helped boost its performance last year. "Heading into 2011, we plan to continue our disciplined approach to hospital acquisitions and joint ventures, and remain what we believe to be the only pure player in the non-urban sector," CEO Gary Newsome said in a statement.

The company's full-year outlook for 2011 earnings is expected to be between $0.72 and $0.76 per diluted share, without taking into account benefit from potential 2011 acquisitions. That's more than the $0.65 EPS reported in 2010.

For more:
- here's the HMA press release
- read the Wall Street Journal article