NEW YORK (AP) — Shares of Select Medical Holdings Inc. retreated Thursday after rallying earlier this week when the company reported better-than-expected results for the second quarter and raised its guidance for the year. Its shares have surged over the last three months. Two analysts downgraded their rating on the stock.

THE SPARK: The hospital and rehabilitation center operator reported after the market closed Tuesday that its net income more than tripled to $43.2 million, or 31 cents per share, from $11.7 million, or 8 cents per share. Revenue grew 7 percent to $750.2 million. Analysts expected a smaller profit of 25 cents per share and $729.8 million in revenue, according to FactSet.

The company said it expects annual net income of $1.01 to $1.06 per share and revenue of $2.9 billion to $2.98 billion. Previously the company had forecast net income of 86 to 94 cents per share and $2.85 billion to $2.95 billion in revenue. Analysts expected net income of 94 cents per share and $2.94 billion in revenue on average.

THE BIG PICTURE: The Mechanicsburg, Pa., company operates 111 long-term acute care hospitals and 12 acute rehab hospitals, along with 956 outpatient rehab centers. It also provides contract therapy services to nursing homes, hospitals, and other facilities.

Shares of Select Medical have climbed since April, after Medicare said it might take another year before it implements new rules about patient admissions and reimbursement.

THE ANALYSIS: Analysts for UBS and Robert W. Baird & Co. downgraded Select Medical shares to the equivalent of "Neutral" from "Buy." Baird analyst Whit Mayo said investors should be careful about assuming Medicare will relax its rules, and said that with Select Medical shares up significantly in 2012, it is time to take profits.

SHARE ACTION: Select Medical shares lost $3.31, or 24 percent, to $10.42 in afternoon trading. The stock jumped 16 percent Wednesday. Since April 24, Select Medical shares are up 75 percent.