November 2, 2009 / 11:43 PM / 10 years ago

UPDATE 1-Kindred Q3 beat market, sees 2010 profit below view

* Raises 2009 profit view, reaffirms rev view

* Sees 2010 below market est

* Shares down 10 pct in after-market trade

Nov 2 (Reuters) - Kindred Healthcare Inc KND.N reported higher-than-expected quarterly results, but forecast 2010 profit below market estimates, citing weakness in Medicare and Medicaid Rates, sending its shares down 10 percent after the bell.

The long-term acute care hospitals owner also raised its 2009 earnings forecast to $1.48 to $1.53 a share, from its prior view of $1.35 to $1.45 a share.

The company said its 2009 and 2010 outlook reflects the expected impact of the final rules issued by the Centers for Medicare and Medicaid Services, which is related to payment rates for long-term acute care hospitals and nursing centers.

“We are concerned in the near term with weakness in both Medicare and Medicaid rates in our nursing center business... We do not believe that we can completely offset weaker government reimbursements in this division,” Chief Executive Paul Diaz said in a statement.

For 2010, the company expects to earn $1.20 to $1.35 a share from continuing operations, missing analysts’ average estimate of $1.36 a share, according to Thomson Reuters I/B/E/S.

For the third-quarter, the company earned 14 cents a share from continuing operations, beating analysts’ mean expectation of 3 cents a share, as it saw a strong growth in non-government admissions and favorable commercial pricing. [ID:nWNAB8644]

Shares of the Louisville, Kentucky-based company fell 10 percent to $13.79 in after-market trade. They closed at $15.34 Monday on the New York Stock Exchange. (Reporting by Anuradha Ramanathan in Bangalore; Editing by Pradeep Kurup)

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