Cross Country 3Q profit tumbles 84 percent

Cross Country Healthcare says skilled nursing revenue plunged in 3Q; outlooks miss estimates

• On 6:37 pm EST, Monday November 2, 2009

BOCA RATON, Fla. (AP) -- Health care staffing services company Cross Country Healthcare Inc. said Monday its profit shrank 84 percent in the third quarter, as the recession cut into demand for skilled nurses, and older doctors appeared to postpone retiring, leaving fewer positions to be filled.

Cross Country said nurse and allied staffing revenue was cut in half as its customers chose to use more "per diem" nurses and fewer skilled professionals. Physician staffing revenue also declined, which the company said might be due to older doctors putting off retirements due to the stock market plunge and weaker housing market, as well as a dip in elective surgeries. Clinical trial revenue also decreased.

The company said its profit dropped to $968,000, or 3 cents per share, from $6.2 million, or 20 cents per share. Total revenue slid 27 percent, to $129.6 million from $178.1 million. According to Thomson Reuters, analysts were projecting a profit of 2 cents per share and $132.4 million in revenue.

Nurse and allied staffing revenue was down 50 percent to $64.1 million, with staffing volume down 48 percent. Physician staffing revenue slipped 3 percent to $39.6 million, and staffing days filled fell 13 percent.

Clinical trial services revenue fell 35 percent to $25.4 million. Cross Country said it saw less demand in that business due to economic and financial market conditions, which reduced testing activity.

Compared with the second quarter of 2009, nurse and allied staffing revenue declined 18 percent, physician staffing revenue dipped 3 percent, and clinical trial services revenue shrank 15 percent.

Cross Country said it expects a profit of 2 to 4 cents per share in the fourth quarter, with $120 million to $123 million in revenue. That translates to a full-year profit of 22 cents to 24 cents per share, and revenue of $574 million to $577 million.

Analysts expect a profit of 3 cents per share and $137.1 million in revenue in the fourth quarter. For the full year, they are forecasting net income of 22 cents per share and revenue of $593.9 million.

Cross Country shares fell 19 cents, or 2.3 percent, to close at $8.07.

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