Earnings Up, Revenue Down for Quarter at Community Psychiatric

Community Psychiatric Centers on Wednesday reported higher third-quarter earnings but lower revenue as industrywide concern about managing health care continued to hurt the company.

The psychiatric hospital network, which operates 50 facilities in the United States, Puerto Rico and the United Kingdom, also attributed lower revenue to a restructuring of the business in response to shorter stays by patients.

The company earlier this year announced that it was opening transitory care wards, similar to convalescent facilities, to help fill empty beds and generate revenue.

“There is continued downward pressure on pricing due mainly to increasing competition for managed-care business and overcapacity in the industry,” said Richard L. Conte, chairman and chief executive officer.

For the foreseeable future, Conte said, revenue will continue to sag.

For its third fiscal quarter, which ended Aug. 31, the company reported a profit of $2.09 million, or 5 cents a share, up from $435,000, or 1 cent a share, for the same period in 1991. Third-quarter income last year was reduced because the company set aside money in reserve to cover bad debts. That cut pretax earnings for the quarter by about $23 million, the company stated.

Revenue for the latest quarter declined to $81.6 million from $90.3 million a year earlier. Conte said a trend by insurance companies to encourage shorter hospital stays has caused average net revenue at the company to decline 3%.