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For the quarter ended June 30, 2008, revenues were $428.4 million, an 8%increase over revenues of $397.1 million for the second quarter of 2007. TheCompany estimates that the increase in net revenues was comprised ofapproximately 14% internal growth, partially offset by Medicare pricereductions of approximately 6% taking effect in 2008. Net income for thequarter ended June 30, 2008, was $62.6 million compared to net income of $56.0million for the second quarter of 2007. Diluted earnings per share were $0.82for the quarter ended June 30, 2008, compared with $0.63 diluted earnings pershare for the comparable prior year period.
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Revenues for the six months ended June 30, 2008, were $843.8 million, a 9%increase over revenues of $775.5 million for the comparable period in 2007.The Company estimates that the increase in net revenues was comprised ofapproximately 13% internal growth, partially offset by Medicare pricereductions of approximately 4% taking effect in 2008. Net income for the sixmonths ended June 30, 2008, was $123.3 million compared to net income of$109.9 million for the first half of 2007. Diluted earnings per share were$1.61 for the six months ended June 30, 2008, compared with $1.23 dilutedearnings per share for the comparable period last year.
Revenues and earnings for the three and six months ended June 30, 2008,were impacted by a change in ordering patterns for certain inhalation drugs bycustomers concerned about the potential loss of Medicare coverage of thesedrugs. In April of this year, the Durable Medical Equipment MedicareAdministrative Contractors ("DME MACs") issued a revision of the NebulizerLocal Coverage Determination ("LCD") that would have effectively eliminatedMedicare reimbursement and patient access to these medications as of July 1,2008. In response to this potential loss of access, a significant number ofthe Company's customers placed orders in June to receive a 90-day shipment ofthese drugs rather than a 30-day shipment. The net effect of this change inordering patterns was to accelerate approximately $18.9 million of revenues inthe second quarter that would otherwise be expected to occur in the thirdquarter. The Company estimates that diluted earnings per share would havebeen $0.06 lower in the second quarter without the impact of the increase inpharmacy shipments.
The Centers for Medicare and Medicaid Services ("CMS") subsequently issuedinstructions to the DME MACs to delay the implementation of the LCD. As aresult of the instructions by CMS to the Medicare contractors to preserveaccess to these medications, the Company expects its pharmacy customers toplace orders to receive a 30-day drug shipment during the third quarter of2008. The Company would therefore anticipate that its revenues and relateddirect costs will be reduced in the third quarter by amounts similar to thosethat increased operating results in the second quarter.
Lincare added 10 new operating centers during the second quarter derivedfrom internal development. During the first half of 2008, Lincare opened 20new locations. The total number of Lincare locations expanded to 1,039 atJune 30, 2008. Lincare also completed the acquisition of a small infusiontherapy provider in Mississippi during the second quarter.
John P. Byrnes, Lincare's Chief Executive Officer, said, "We are pleasedwith Lincare's operating and financial performance in the first half of 2008.Our financial position is strong and we achieved significant operating cashflows in the first six months of 2008."
Lincare generated $193.9 million of cash from operating activities andinvested $61.4 millio
