(RTTNews) - Friday, specialty pharmaceutical health care organization BioScrip, Inc. (BIOS: News ) reported a higher profit for the third quarter, as a lower cost of revenue offset a decline in revenue. BioScrip achieved the lower cost of revenue by focusing on higher-margin therapies and improved supply chain programs during the quarter.

The Elmsford, New York-based company's third quarter net income increased to $5.7 million or $0.14 per share from $1.4 million or $0.04 per share for the third quarter of 2008.

On average, three analysts polled by Thomson Reuters estimated earnings of $0.10 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter decreased to $333.5 million from $359.4 million in the year-ago quarter. Analysts expected revenues of $335.58 million for the quarter.

The company said it expected a decline in revenue due to the elimination of Medicare Competitive Acquisition Program in December 2008 and the termination of United Health Group organ transplant and HIV/AIDS contracts.

The decline in revenue was partially offset by increased sales of higher-margin infusion therapies and other specialty sales. Excluding the effects of these contracts, third quarter revenues were 7.9% higher than the third quarter of 2008, the company noted.
Gross profit for the quarter climbed to $41.5 million, or 12.4%, from $36.1 million, or 10%, in the third quarter of 2008 while cost of revenue decreased to $291.98 million from $323.35 million a year ago. The increase in gross profit was primarily from improved product mix due to focus on higher-margin therapies as well as improved supply chain programs, the company said.

Operating profit for the quarter climbed to $6.7 million from $2.8 million for the third quarter last year.

For the nine-month period, net income surged to $13.4 million or $0.34 per share from $2.6 million or $0.07 per share for the same period last year. Revenue for the period declined to $988 million from $1.04 billion in the comparable period last year.

BIOS is losing $0.30 or 3.95%, and is trading at $7.28 on a volume of 377 thousand shares on the Nasdaq.

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by RTT Staff Writer

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