Profits Plunge at Community Psychiatric Centers : * Earnings: Chain blames factors ranging from the recession to reports of alleged insurance fraud.

Reeling from the recession, bad publicity and a slump in the psychiatric care industry, Community Psychiatric Centers on Monday reported a $3-million fourth-quarter loss and said annual earnings had tumbled by nearly half.

Earnings for the year ended Nov. 30 fell 46% to $45.3 million, or 98 cents a share, from $83.2 million, or $1.80 a share, a year earlier. Revenue rose 4% to $396.6 million for the year.

The psychiatric hospital chain blamed the downturn on a cost-cutting squeeze by insurance companies, uncollectible debts, the recession and reports of alleged patient abuses and insurance fraud in the psychiatric care industry.

“Hopefully, this quarter represents the low watermark for the company,” said John F. Hindelong, an analyst with the New York brokerage firm of Donaldson, Lufkin & Jenrette.

Suzanne Hovdey, a Community Psychiatric spokeswoman, said the company expects “gradual improvement” in 1992. But Hindelong and other analysts said the company’s short-term financial prospects remain uncertain.

“Earnings were pretty much as pre-advertised,” said Kathleen M. Miner, an analyst with Cowen & Co. in Boston. But asked whether the Community Psychiatric had turned the corner, Miner demurred.

“I wouldn’t bet on that . . . “ she said. “It’s tough to tell, and there isn’t a clear sign one way or the other.”

Community Psychiatric stock, traded on the New York Stock Exchange, closed Monday at $14.75 a share, up 87.5 cents.

Since November, Community Psychiatric has bought back 549,800 shares of its own stock. On Monday, the company for the first time said it has earmarked $50 million for repurchasing its stock, leaving it with at least $42 million yet to spend. It has 46.5 million shares outstanding.

The $3-million fourth-quarter loss, which amounted to 6 cents per share, contrasted with earnings of $20.7 million, or 45 cents a share, in the year-earlier quarter.

But the fourth-quarter results included an additional $14-million charge, or 19 cents a share, for uncollectible bills. The company previously set aside $23 million in the third quarter to cover unpaid bills--about $7 million of that amount due to a dispute with the Canadian government over payment for patients sent to the United States for treatment.

Hovdey said the company still hopes to collect some of that money and does not anticipate any future write-offs for unpaid bills.

Meanwhile, the company responded to the bad publicity it has received as a result of allegations of understaffing, patient lawsuits and an investigation into its billing practices by the Texas attorney general. A number of other psychiatric chains are also being probed.

Community Psychiatric has not been charged with wrongdoing in Texas and “is unaware of being targeted in any other state investigations,” the company said in a statement.

“Being looked at and being charged are two different things,” Hovdey said.

CPC’s Performance

For the year ended Nov. 30, 1991, Community Psychiatric Centers’ profit plunged to $45.3 million, down 46% from fiscal 1990. The Laguna Hills-based psychiatric hospital chain also reported a fourth-quarter loss of $3 million. It blamed the downturn on cost-cutting by insurance firms, uncollectible bills, the recession, and negative publicity.

Figures are in thousands, except per-share data.

4th Qtr 4th Qtr 12 Months 12 Months 1991 1990 1991 1990 Revenue $85,454 $99,610 $396,611 $381,791 Net income (loss) (3,003) 20,735 45,289 83,211 Per share (loss) (.06) 0.45 0.98 1.80

Source: Community Psychiatric Centers