ManorCare reports promising earnings

5/4/2001

Toledo's Manor Care, Inc., yesterday reported first-quarter profit of $25 million, or 24 cents a share, a number that beat analyst expectations by a penny a share and prompted management to increase their earnings guidance for the year.

The earnings from the area's fifth largest corporation were in contrast to the mostly negative revenue and profit pictures painted by other local firms.

After a good first quarter - which far exceeded the $783,000, or penny a share, lost in the same period a year ago - Manor Care expects to have earnings of $1.05 to $1.10 a share this year, Paul Ormond, Manor Care's president and chief executive, told analysts during a conference call.

Manor Care previously expected earnings of $1 to $1.05 a share for 2001. The company had revenues of $638 million last quarter, up 12 percent from $570 million the same period last year.

“We were pleased with the quarter,” said Geoffrey Meyers, chief financial officer for the Toledo owner-operator of more than 500 long-term care centers and other health-care facilities.

Yet while Toledo's Dana Corp. and other area companies are laying off employees and trimming jobs, Manor Care has the opposite problem. Health-care workers are hard to come by in some areas, especially for some shifts, forcing the company to use costlier temporary agencies, officials said.

Another ongoing problem for the company is the high-litigation environment in Florida, Mr. Ormond said. The company, though, is “cautiously optimistic” as Florida debates tort reform legislation.

Having good occupancy rates, improved Medicare reimbursements, and additional services such Alzheimer's disease care will help deliver a positive year overall for the well-managed company, said Elliott Schlang, managing director of LJR Great Lakes Review in Cleveland. It rates Manor Care's stock a “gradual accumulate.”

“The special services that they're now providing enable them to provide a more comprehensive service to their residents.”

Manor Care's stock closed at 4 p.m. yesterday at $24.85 a share on the New York Stock Exchange, up $1.10 a share and near its 52-week high of $25 a share.