UPDATE 1-LifePoint Hospitals net profit down 19 percent

(Adds continuing operations results, revenue, CEO quote)

NEW YORK, Oct 25 (Reuters) - Rural hospital chain LifePoint Hospitals Inc (LPNT.O: Quote, Profile, Research, Stock Buzz) on Thursday posted a lower net profit due to unpaid medical bills, high labor costs and medical malpractice insurance expenses.

The Brentwood, Tennessee-based company said third-quarter net profit fell 19.1 percent to $28.2 million, or 49 cents per share, from $34.9 million, or 62 cents per share, in the year-ago quarter.

Excluding operations of hospitals the company has classified as discontinued, LifePoint reported income from continuing operations of $31.6 million, or 55 cents per share, down 6.9 percent from $34.0 million, or 60 cents per share in the year-earlier quarter.

Analysts, on average, had expected the company to post earnings of 52 cents per share, according to Reuters Estimates.

Revenue from continuing operations rose 4.6 percent to $656.2 million.

"We are making progress in addressing industry challenges by implementing our strategic plan. Our intense, company-wide focus on growing market share and managing costs is bearing fruit," William Carpenter III, president and chief executive, said in a statement.

The U.S. hospital industry is struggling with increasing numbers of unpaid bills, known as bad debt, amid rising numbers of Americans lacking health insurance and higher co-payments for insured patients.

At the same time, the sector has been engulfed by a wave of consolidation and buyout activity from private equity groups, taking advantage of low stock market valuations and management's desire to escape Wall Street's scrutiny. (Reporting by Lisa Baertlein and Ilaina Jonas)