Moody’s Investors Services raised the outlook on the ratings of VCA Antech Inc. to positive from stable, saying the veterinary hospital operator’s profitability and credit metrics will improve in 2008.

“Veterinary services are somewhat discretionary and a weakening economy should slow organic growth rates from the levels achieved in the past few years,” Moody’s said in a statement. “However, Moody’s expects that a low to mid-single digit organic revenue increase combined with the effect of acquisitions completed in 2007 and early 2008 will drive profit improvement over the next year.”

Moody’s said the ratings are slightly constrained due to the potential for more debt-financed acquisitions but added that the company’s track record of effectively integrating acquired companies, while maintaining solid financials, eases that risk.

In February, VCA reported a 27 percent up-tick in fourth quarter net income along with a 17 percent hike in sales for the quarter. However, the company projected earnings per share for 2008 of $1.55 to $1.60 per share, which was below Wall Street’s consensus of $1.63, according to Thomson Financial. Shares in VCA tumbled nearly 20 percent the week of the earnings release.

Shares in the Los Angeles-based veterinary clinic operator were up nearly 1 percent to $28.07 Thursday.