Top Performer for Tuesday: HealthSouth (HLS)

HealthSouth Corporation (HLS - Analyst Report) is up approximately 14% a day after the provider of inpatient rehabilitative healthcare services announced first-quarter results that included year-over-year gains in profit and revenue.

"The strategy we put in place in 2007 - focusing on deleveraging, growth, and expense management - yielded solid results in 2008 and continued to generate solid results in the first quarter of 2009," stated President and CEO Jay Grinney.

Adjusted EPS from continuing operations was 39 cents, compared to the consensus of 21 cents. This marks the fourth straight quarter in which HLS easily beat Wall Street expectations. The result also trounced the year-ago result.

Revenues increased 2.3% to $475.1 million, versus last year's $464.2 million. The increase was attributed to a 5.7% quarter-over-quarter increase in patient discharges offset by lower pricing.

A highlight of the quarter was HLS' ability to pay down an additional $85 million in debt thanks to its strong cash flow from operating activities.

Now we'll see if earnings estimates for the company move higher, as analysts have kept them rather steady of late. Nonetheless, the momentum is headed in the right direction with expectations for this year that are higher by 2.5% in the past 2 months.

Analysts see 98 cents for next year, which is currently almost 20% better than this year's profit estimate. A month ago, the consensus for 2010 was at 93 cents, accounting for a climb of 5.4%.

HLS is part of the Medical - Outpatient/Home care industry. It is 1 of 2 companies from that space on today's Zacks #1 Rank List, which has 223 stocks. The other company is Odyssey Healthcare (ODSY - Analyst Report).