By Ben Fox Rubin
Lincare Holdings Inc.'s (LNCR) second-quarter earnings were up
12% as the oxygen-equipment provider reported stronger revenue,
masking higher expenses and fewer contributions from Medicare.
The Florida-based company, which provides oxygen and other
respiratory services to patients at home, agreed to be acquired by
German industrial-gas supplier Linde AG (LNEGY, LIN.XE) this month
for about $4.6 billion, representing a 22% premium to Lincare's
closing price before the offer was disclosed. The deal should give
Linde a greater presence in home healthcare and reduce its reliance
on Europe.
Lincare, which receives most of its revenue from government
spending, has been able to grow its top line for more than two
years despite reduced Medicare payments.
Lincare reported a profit of $47.9 million, or 56 cents a share,
up from $42.8 million, or 45 cents a share, a year earlier. Revenue
grew 11% to $496.2 million, including a negative impact of $2.1
million from Medicare payment reductions.
Analysts polled by Thomson Reuters most recently projected
earnings of 55 cents on revenue of $503 million.
Operating margin was flat at 17.8%, though input costs increased
13% and bad-debt expenses jumped 44%.
Shares closed Monday at $41.33 and were inactive after hours.
Through the close, the stock was up 61% so far this year amid the
acquisition activity.
Write to Ben Fox Rubin at ben.rubin@dowjones.com