Athenahealth Q2 Results Top Estimates, Backs 2014 Outlook

(RTTNews) - Healthcare technology company Athenahealth, Inc. (ATHN) reported Thursday a loss for the second quarter that sharply narrowed from last year, reflecting improved margins and strong double-digit revenues growth. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed its earnings and revenue guidance for the full-year 2014.

"We continue to make progress in bringing the value of cloud-based, software-enabled services to health care. We're adding more health care providers and organizations onto our national cloud network and we are growing the number of insight-driven services and workflows we deliver to further our clients' financial and operational performance," Chairman and CEO Jonathan Bush said in a statement.

The Watertown, Massachusetts-based provider of cloud-based business services for physician practices, reported a net loss of $2.16 million or $0.06 per share for the second quarter, narrower than $12.42 million or $0.34 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $12.20 million or $0.32 per share, compared to adjusted net loss of $3.12 million or $0.08 per share in the year-ago quarter.

On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 27 percent to $185.92 million from $146.30 million in the same quarter last year, and topped twenty-three Wall Street analysts' consensus estimate of $182.00 million by a whisker.

Revenue from athenahealth-branded services grew 27 percent to $170.3 million, while revenue from Epocrates-branded services declined 23 percent to $11.3 million from the prior-year quarter.

Athenahealth's adjusted operating margin expanded 400 basis points to 11.6 percent from last year, as adjusted gross margin improved 60 basis points to 63.0 percent from a year ago.

"We continue to build on our strong momentum, growing our core physician network by 28%, signing on new strategic relationships, like Henry Schein, and increasing our automation rate to our 49% goal. As such, we are pleased to reaffirm our guidance for full year fiscal 2014," Acting CFO Karl Stubelis stated.

Looking ahead to fiscal 2014, Athenahealth continues to expect adjusted earnings in the range of $0.98 to 1.10 per share, on projected total revenues between $725 million and $755 million. Street is currently looking for full-year 2014 earnings of $1.04 per share on annual revenues of $741.02 million.

ATHN closed Thursday's regular trading session at $127.78, down $2.75 or 2.11% on a volume of 0.72 million shares. However, the stock soared $18.92 or 13.60% in after-hours trading.