Top Performer for Wednesday: RehabCare Group (RHB)

RehabCare Group, Inc. (RHB - Snapshot Report), a leading provider of rehabilitation program management services, gained more than 13% today on the back of a strong first-quarter performance.

This is the second straight day that we're visiting the Medical - Outpatient/Home Care industry. Yesterday, HealthSouth (HLS - Analyst Report) was featured as the top performer. There are 4 companies from this industry on today's Zacks #1 Rank List, which includes 224 stocks. The other 2 companies on the list, besides RHB and HLS, are Genoptix, Inc. (GXDX - Snapshot Report) and Odyssey Healthcare (ODSY - Analyst Report).

RHB earned 48 cents per share in its first quarter, which continued a solid streak of meeting or beating Wall Street's quarterly estimates. Analysts were expecting this Zacks #1 Rank Top Performer to report 31 cents in the quarter, marking a surprise of more than 50%. The past 4 quarters have accounted for an average surprise of around 33%.

RHB stated that the quarter's results demonstrate that its growth and performance improvement initiatives have "clearly taken hold".

The quarter's results might inspire some upward revisions from analysts, who have been quiet of late. EPS estimates for this year are unchanged in the past 30 days, but are up 2.4% from 2 months ago.

Analysts expect profit in 2010 to advance almost 18% from 2009. Estimates for the year are up 4% in 3 months.

One of the big performers during the quarter was the company's Skilled Nursing Rehabilitation Services (SRS) division, where operating revenues advanced 9.5% to $123.1 million. RHB attributed the division's performance to significant same-store revenue growth, exceptional average daily census and strong productivity.

Meanwhile, operating revenues for the Hospital Rehabilitation Services (HRS) division moved higher by 7.2%, while operating revenues at the Hospital division advanced 28.6%.

"While economic conditions may constrain some revenue generation during the year..., other market variables should create new business prospects, particularly within our HRS division," stated President and CEO John H. Short, Ph.D, who also said that its strong positive cash flow continues to give the company "a sure-footed position during unstable economic times."