Life Time Fitness share drop after 3Q results

Life Time Fitness shares drop as company reports weak membership trends in 3Q results

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CHANHASSEN, Minn. (AP) -- Shares of Life Time Fitness Inc. tumbled Thursday after the gym operator's third-quarter profit fell and it reported a 3 percent drop in membership from the prior quarter.

The Chanhassen company's shares fell $3.02, or 10.4 percent, to $26.08 in afternoon trading.

The stock dropped even though Life Time Fitness beat a Wall Street estimate for third-quarter profit and raised its 2009 forecast.

It said it now expects $1.78 to $1.81 per share, up from an earlier prediction of $1.65 to $1.75. Analysts polled by Thomson Reuters expect $1.74.

Stifel Nicolaus & Co. analyst Thomas Shaw said membership growth looked sluggish as the company reported low enrollment fees and the loss of 18,000 members from the quarter immediately prior.

"Some of this is likely seasonal, as clubs likely lost members holding on for summer pool usage," Shaw said.

The company's third-quarter profit fell 4 percent to $20.6 million, or 51 cents per share, in the quarter that ended on Sept. 30. That is down from the $21.6 million, or 55 cents per share, it earned a year earlier.

It beat a 48 cent per share consensus estimate of analysts polled by Thomson Reuters.

Revenue rose 8 percent to $214.3 million from $198.8 million. Analysts had expected $215.2 million.

Membership dues grew 10 percent from the same period a year ago but enrollment fees dropped 3 percent.

The number of memberships grew 6 percent to 590,716 from the year before but was down from the 608,281 members it had at the end of the second quarter.