Lower Taxes Allow NME to Post 51% Earnings Gain

National Medical Enterprises, the nation’s third-largest for-profit hospital chain, said Wednesday that its earnings rose 51% in the second quarter of its fiscal year, largely due to lower taxes.

NME, which is headquartered in Los Angeles, said it earned $43.8 million in the quarter that ended Nov. 30. During the same quarter a year ago, NME earned $29 million.

However, NME’s results before taxes were actually slightly worse than a year ago, reflecting continued hard times for the health-care industry. NME’s income before taxes declined 4% despite an 8% gain in revenue.

NME’s taxes are lower as a result of the Tax Reform Act of 1986. NME’s taxes in its second quarter declined 36%, to $28.9 million from $44.9 million a year ago.

In a statement, NME said its earnings were helped by a strong performance by its specialty hospitals, which include psychiatric and rehabilitation hospitals. The company said income from its acute-care hospitals and its long-term care operations declined.