Athenahealth Slips To Q3 Loss, But Results Match Estimates, Backs 2014 Outlook

(RTTNews) - Healthcare technology company athenahealth, Inc. (ATHN) reported Thursday a loss for the third quarter compared to a profit last year, despite double-digit revenue growth, reflecting higher expenses. Both adjusted earnings per share and quarterly revenues matched analysts' expectations. The company also reaffirmed its earnings and revenue guidance for the full-year 2014.

athenahealth is a provider of cloud-based services and mobile tools for medical groups and health systems.

"We continued to see strong momentum across the business in the third quarter, with record physician additions, the opening of two extraordinary offices in Atlanta and San Francisco, the launch of a brand new user experience across our client base, and industry-leading Meaningful Use Stage 2 attestation results," 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 $1.63 million or $0.04 per share for the third quarter, compared to net income of $1.17 million or $0.03 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $10.4 million or $0.27 per share, compared to $11.15 million or $0.29 per share in the year-ago quarter.

On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 26 percent to $190.43 million from $151.53 million in the same quarter last year, and matched twenty-two Wall Street analysts' consensus estimate of $190.40 million.

Revenue from athenahealth-branded services grew 31 percent to $175.6 million, while revenue from Epocrates-branded services declined 27 percent to $9.8 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. Third-party tenant and other non-core revenue also improved 32 percent to $5.0 million from last year.

Total expense for the quarter increased to $191.69 million from $148.89 million in the year-ago quarter.

"As we prepare for the next wave of growth, we are intently focused on achieving the ambitious goals we laid out for 2014, as well as refining our 2015 roadmap and priorities," Bush added.

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 $1.09 per share on annual revenues of $746.65 million.

ATHN closed Thursday's regular trading session at $120.49, down $1.73 or 1.42% on a volume of 0.86 million shares. The stock lost a further $2.44 or 2.03% in after-hours trading.