West Penn Allegheny Health System turned a $6.9 million net profit in the first six months of fiscal 2008, up 67.7 percent from the same year-ago period.

The positive outcome can be attributed largely to the aftereffects of a 2007 debt refinancing -- including a $5 million reduction in interest expense and a $6.7 million bump in investment earnings.

Strip out investment income, and the region's second-largest hospital network actually recorded a $12 million operating loss in the six months ended Dec. 31, according to Fitch Ratings analyst Jeff Schaub, who follows West Penn Allegheny from New York.

That operating loss -- reflecting the performance of West Penn Allegheny's hospitals minus any investment income -- is slightly worse than an $8 million operating deficit in the same six-month period a year ago.

"I wouldn't call that a trend," said Mr. Schaub, noting that the operating margin only fell from -1.1 percent to -1.6 percent. "Basically the same number."

West Penn is still in the midst of a turnaround that began with the 2000 merger of Allegheny General Hospital and Western Pennsylvania Hospital. Several top executives left last year, including chief executive officer Jerry Fedele. A new 45-year-old chief executive officer, Dr. Christoper Olivia, started last month, and the system is working its way through an integration of services designed to reduce expenses and improve efficiency.

The system "is not showing any great improvement" with its recent financial results, Mr. Schaub said, but the numbers also are "not out of line with what we are expecting."