February 16, 2017 / 11:27 PM / a year ago

RPT-UPDATE 1-Dialysis service provider DaVita's profit beats estimates

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Feb 16 (Reuters) - DaVita Inc reported a better-than-expected quarterly profit on Thursday as demand rose for its kidney care services.

The U.S. dialysis service provider’s shares were up 2.61 percent at $66.30 in after-market trading.

The results come amid growing controversy over attempts by the U.S. Department of Health and Human Services to prevent dialysis providers from using premium assistance from outside charities to steer patients into Obamacare individual insurance plans instead of Medicare or Medicaid to receive higher payments for medical services.

Both DaVita and German rival Fresenius Medical Care received subpoenas from U.S. federal prosecutors last month investigating their ties with a charity that helps patients pay for kidney dialysis. The charity, the American Kidney Fund, also received a subpoena.

DaVita has alleged that the rule violates federal law and could cause “irreparable harm” to dialysis patients.

A U.S. court last month upheld a temporary hold on the rule, which was announced on Dec. 14.

Net income attributable to the company was $157.7 million, or 80 cents per share, in the fourth quarter ended Dec. 31, compared with a loss of $6 million, or 3 cents per share, a year earlier.

Excluding items, the company earned 98 cents per share, beating the average analyst estimate of 91 cents, according to Thomson Reuters I/B/E/S.

Revenue rose to $3.72 billion from $3.53 billion. Analysts had expected $3.74 billion.

DaVita said total U.S. dialysis treatments in the latest quarter represented a per day increase of 3.7 percent from a year earlier.

The company said it expected 2017 adjusted operating income to be between $1.64 billion and $1.78 billion.

The Denver, Colorado-based company forecast 2017 adjusted operating income for its kidney care business to be between $1.53 billion and $1.63 billion. (Reporting by Akankshita Mukhopadhyay in Bengaluru; Editing by Sriraj Kalluvila)

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