Top Performer for Wednesday: RehabCare (RHB)

RehabCare Group, Inc. (RHB - Snapshot Report), a member of the Medical-Outpatient/Home Care industry, has made the Zacks #1 Rank Top Performers List for Wednesday with a gain of approximately 11%.

There are 3 other companies from this industry on today's Zacks #1 Rank List: HealthSouth Corp. (HLS - Analyst Report), LHC Group, Inc. (LHCG - Snapshot Report) and Odyssey HealthCare (ODSY - Analyst Report). (In total, there are 225 stocks on today's Zacks #1 Rank List.)

RHB develops, markets, and manages comprehensive medical rehabilitation programs and therapy services in acute-care hospitals, skilled nursing units and outpatient facilities. The company is associated with 1,200 hospitals and skilled nursing facilities in 42 states.

Good Trend in Earnings Estimates

Profit expectations for both this year and next have been climbing higher for weeks. Four covering analysts expect earnings of $1.46 for the year ending December 2009, which is up 12.3% over the past 2 months, including a gain of 3.5% in the past 30 days.

There are only half as many analysts currently looking at the year ending December 2010, but they too have raised forecasts. The consensus of $1.77 is 15.7% higher than 2 months ago and 6% higher than 30 days ago. Furthermore, the forecast for next year is about 21% higher than this year.

RHB Sells Phase 2 Consulting

The big news for RHB last week was the sale of Phase 2 Consulting - its healthcare management consulting division - to Premier, Inc. for an undisclosed amount. Proceeds from the sale will be used to further reduce outstanding debt.

"Given the aging population and the support for bundled Medicare payments building in Washington, we foresee a rapidly expanding demand for our continuum of post-acute care services," said President and CEO John H. Short, Ph.D. "This transaction allows us to focus more of our resources and energies on our core business."

Average Surprise of +33% Over 4 Quarters

The company's first-quarter report from May 6 not only helped earnings estimates to rise, but also made RHB the Zacks #1 Rank Top Performer for that day.

Earnings per share of 48 cents beat expectations by more than 50% and contributed to an average surprise of 33% over the past 4 quarters.

Revenues increased 11.6% to $203.4 million in the quarter, versus $182.4 million last year. The company's Skilled Nursing Rehabilitation Services (SRS) division reported a 9.5% increase in operating revenues to $123.1 million. Meanwhile, operating revenues for the Hospital Rehabilitation Services (HRS) division moved higher 7.2%, while operating revenues at the Hospital division advanced 28.6%.