By Mike Boyer
The Cincinnati Enquirer

Shares of Hillenbrand Industries Inc. slumped 16 percent Thursday after the Batesville, Ind., casket and hospital bed maker reported a second-quarter loss and lowered earnings expectations for the rest of the year.

Hillenbrand's shares closed at $56.75, down $10.85.

CEO Frederick W. Rockwood said operating issues at its Hill-Rom hospital bed unit caused the lower second-quarter results and lower expectations for the year.

He said the company's introduction of two new bed lines has prompted hospitals to delay orders while they evaluate the new products.

"While all indications so far are that the new offerings will be a success - as customer feedback has been enthusiastic - in the short run they have disrupted order patterns,'' Rockwood said.

In addition, the performance of Hill-Rom's European operations remains weak, and rising commodity prices will increase Batesville Casket Co. costs by $7 million.

For the three months ended March 31, Hillenbrand reported a net loss of $48 million, or 76 cents a share, after including a loss from discontinued operations of $1.61 a share.

That loss included a one-time net of tax charge of $109 million for the pending sale of its Forethought Financial Services Inc. to a private investment group.

In the second quarter last year, Hillenbrand reported net income of $62 million, or $1 a share.

In the latest quarter, income from continuing operations was $53 million, or 85 cents a share, $1 million higher than a year ago, but short of its previous guidance of 87 cents a share.

Revenues rose 12 percent to $482 million.

The company said it expects earnings for the year in the range of $3.25 to $3.30 a share, down from the previous $3.65 to $3.73 a share. Hillenbrand expects third-quarter earnings from continuing operations of between 74 and 77 cents a share.

E-mail mboyer@enquirer.com