Sunrise Senior Living Inc. reported a third-quarter profit after settling a legal dispute with a competitor, sending its shares surging in Thursday trading.
The real estate investment trust runs senior living communities in the U.S., Canada, and the United Kingdom. It said it earned $18.7 million, or 33 cents per share in the quarter ended Sept. 30. A year ago Sunrise lost $44.4 million, or 88 cents per share. In the latest quarter it cut its spending 9 percent and reported a profit from operations, compared with a loss last year.
Revenue grew 6 percent, to $383.3 million from $361.5 million. In August, HCP Inc. agreed to pay Sunrise $40 million as part of a settlement and restructuring agreement. The deal gave HCP the right to terminate Sunrise as the manager of 27 communities that HCP owns. HCP paid Sunrise another $10 million after the quarter ended. Sunrise also said its management fees and resident fees for consolidated communities grew, while reimbursed management costs fell.
In afternoon trading, Sunrise stock jumped 87 cents, or 25.7 percent, to $4.26.
Sunrise operated 349 communities at the end of the quarter. In October it agreed to sell some joint venture and partnership assets in the U.S. and Canada to Ventas Inc. for $41.5 million. Those businesses own 58 communities that Sunrise manages, and it will continue to manage them after the sale is complete.