Net income for the quarter climbed to $20.3 million, or 37 cents per share, from $15.5 million, or 29 cents per share, a year ago. Income from continuing operations totaled 38 cents per share in the latest period.

Total revenue grew 59 percent to $402 million from $253.7 million a year ago, with revenue per patient day rising 6.9 percent in facilities open at least a year.

Analysts were looking for profit of 38 cents per share on slightly higher revenue of $406.5 million.

The company backed its outlook for 2007 adjusted earnings from continuing operations of $1.47 to $1.49 per share, and forecast 2008 profit of $1.83 to $1.87 per share.

Analysts are predicting 2007 earnings excluding items of $1.49 per share and higher 2008 earnings of $1.93 per share.

Shares fell $1.09, or nearly 3 percent, to $37.84 in afternoon trading on more than triple average volume.

JPMorgan analyst Andreas J. Dirnagl said investors should breathe a sigh of relief over the company's in-line quarterly results and same-store sales growth of 8.3 percent. He reminded those displeased with the company's conservative 2008 outlook that Wall Street's consensus estimate includes contributions from some acquisitions -- contributions the company isn't adding into its forecast.

"We would be strong buyers of Psychiatric Solutions, particularly on any weakness today," Dirnagl wrote in a note to clients.