FOOTHILL RANCH, Calif. (AP) — Nursing home operator Skilled Healthcare Group Inc. said Monday its profit more than doubled in the second quarter, but its shares plunged after Medicare announced a large payment cut to companies that run skilled nursing facilities.

After the markets closed Friday, the Centers for Medicare & Medicaid Services said it will cut reimbursement rates by 11.1 percent starting in October. The agency had said in April that it was considering the cut, but nursing home companies had argued for a smaller change. Skilled Healthcare said it will adjust its annual profit guidance to include the payment cut, but did not say how much its profit might decrease.

"While we are extremely disappointed with the announcement by the Centers for Medicare & Medicaid Services on Friday, we believe we are well positioned for the future with our conservative model for managing our skilled nursing facility business and diversification of our operations to reduce the exposure to such radical changes in Medicare and Medicaid rates," said Skilled Health Chairman and CEO Boyd Hendrickson.

The company's shares dropped $3.51, or 40 percent, to $5.29 in morning trading. Over the past year, shares have traded between $2.26 and $15.93.

Skilled Healthcare said its second-quarter profit rose to $10.6 million, or 28 cents per share, from $4.5 million, or 12 cents per share. Excluding one-time items, Skilled Healthcare said its profit totaled 30 cents per share. However, analysts expected a larger profit of 31 cents per share, according to FactSet.

Skilled Healthcare's revenue grew 7 percent to $215.5 million from $201 million. Long-term care revenue grew 1.7 percent to $173 million, while therapy services revenue rose to $23.7 million from $18.5 million and hospice and home care revenue increased $18.9 million from $12.5 million.

Analysts expected $216.5 million in revenue, on average.

In May, Skilled Healthcare forecast an annual profit of $1.22 and $1.32 per share on revenue of $857 million and $877 million. Analysts expect a profit of $1.27 per share and revenue of $877.3 million.