Psychiatric Solutions advances on 1Q results and new outlook

NEW YORK—Shares of Psychiatric Solutions Inc. climbed Thursday after the psychiatric hospital operator posted strong first-quarter results, and issued a more optimistic full-year outlook.

The Franklin, Tenn., company's profit rose 41 percent, and revenue increased 33 percent year-over-year. The results surpassed Wall Street expectations, and the company raised its annual forecasts above analyst estimates.

The stock advanced $3.21, or 9.3 percent, to close at $37.92.

Citi analyst Gary Taylor said the first quarter showed that, unlike rival hospital operators, Psychiatric Solutions does not feel much of an impact from economic risks and changes in Medicare reimbursement. He said he expects revenue to increase along with patient admissions.

Deutsche Bank analyst Darren Lehrich added that the company was successful in integrating five hospitals it purchased in March.

Psychiatric Solutions has raised its 2008 profit forecast three times over the last few months. In November, it expected full-year profit of $1.83 to $1.87 per share, but now estimates earnings between $2 and $2.04 per share.

Analysts polled by Thomson Financial expect a profit of $1.98 per share.