UPDATE 1-HealthSouth swings to 1st-quarter profit

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NEW YORK, May 6 (Reuters) - HealthSouth Corp (HLS.N: Quote, Profile, Research), a leading U.S. provider of rehabilitation services, reported a first-quarter profit on Tuesday after a year-ago loss on increased revenue from its inpatient hospitals and lower costs.

The Birmingham, Alabama-based company posted a net profit of $19.9 million, or 17 cents per share, compared with a loss of $56.6 million, or 80 cents per share, a year ago.

Excluding items such as accelerated depreciation and professional fees, HealthSouth earned 15 cents per share. On that basis, analysts on average expected 10 cents per share, according to Reuters Estimates.

Net operating revenue for the quarter rose 5.8 percent to $469 million, roughly in line with Wall Street estimates.

Revenue from inpatient hospitals rose 7.7 percent to $423 million, helped by an increase in Medicare reimbursement.

The company said outpatient visits declined 10.6 percent primarily due to the closing of 20 underperforming operations, sending outpatient operating revenue down 3.6 percent.

Total operating expenses for the quarter fell 7 percent to $376.2 million from $404.9 million.

The provision for doubtful accounts -- payments for services owed to the company that it does not expect will be paid -- improved to 1.7 percent of net operating revenue from 2.3 percent in the year-ago quarter.