Brookdale Senior Living just can’t get a break. After its announcement with HCP that is beginning to clear the deck, it came out with its third quarter earnings Monday night, and the results sent the shares down $8.78 during the day, for a decline of 14.7% before recovering a bit.

While the market had been focusing on occupancy, that was about the only area where the company had good news. Assisted living occupancy increased 30 basis points from the second quarter, which seems to be the industry average. Its retirement center occupancy also increased by 30 basis points sequentially. But operating income is declining and its assisted living operating margin plunged by 210 basis points sequentially, and 310 basis points from a year ago. High labor costs and price discounting in the single digits were the two main culprits. Same community performance was not much better.

Although a much smaller part of the business, ancillary services profits were way off. Operating income for the segment, adjusted for G&A expense, plunged by 67% from a year ago, and 54% sequentially. Obviously, the operating margin on ancillary services plunged as well, hitting a low of 2.5% in the third quarter. This was the area touted by management that could grow to over a billion dollars of revenue with the Emeritus acquisition. Third quarter ancillary services revenues were $110.6 million, which is large, but a long way from the goal of $1.0 billion a few years ago, and heading in the wrong direction. The only thing that seems to be growing is the hospice business, with five straight quarters of revenue growth reaching $17.3 million in the third quarter. Unfortunately, that is not a recurring revenue stream.