Allscripts Healthcare Solutions
(
MDRX
), a leading player in the health care information technology
("HCIT") market, reported fourth quarter adjusted (excluding
one-time items other than stock-based compensation expense)
earnings per share of 21 cents trailing the Zacks Consensus
Estimate of 22 cents but ahead of the year-ago earnings per share
of 20 cents.
For fiscal 2011, adjusted earnings per share of 81 cents matched
the Zacks Consensus Estimate.
Reported net income for the quarter was $26 million (or 14 cents
per share) compared with a net loss of $6.2 million (or 3 cents per
share) in the year-ago quarter. Despite the earnings beat, the
stock lost 5.68% and ended at $20.25 in after hours trading on
February 16.
Revenues
Allscripts reported sales of $388.2 million in the fourth
quarter, beating the Zacks Consensus Estimate of $378 million.
Adjusted revenues were $389.2 million, up 15% year over year.
Bookings came to $327.4 million, an increase of 26% year over
year.
For fiscal 2011, the company reported revenues of $1449.1
million, trailing the Zacks Consensus Estimate of $1,452 million.
Adjusted revenues were $1,470 million, up 13% year over year.
Bookings amounted to $1,051 million, up 17%.
Segment-wise Data
Reported revenues consisted of System Sales, Professional
Services, Maintenance and Transaction Processing, which constituted
17%, 18.3%, 28.4% and 36.3%, respectively, of total revenues in the
reported quarter.
Margin
Adjusted gross margin was 45.5% of sales in the reported
quarter, lower than 49.5% in the prior-year quarter. Adjusted
operating margin was 20.2% of sales, lower than 20.6% in the
year-ago quarter.
Balance Sheet
As of December 31, 2011, Allscripts had cash and marketable
securities of $159.5 million and $367 million of outstanding
borrowings.
Other
On May 5, 2011, the company announced a stock repurchase program
amounting to $200 million. As of December 31, 2011, Allscripts had
repurchased about $51 million of shares.
Outlook
The company issued its guidance for 2012. It expects adjusted
revenues in a range of $1,620 million to $1,650 million. Adjusted
operating margin is projected at about 21% to 22%. Adjusted
earnings per share are forecast between $1.06 and $1.10. The Zacks
Consensus Estimates are earnings per share of 98 cents on sales of
$1,615 million.
The health care information technology market is competitive and
price sensitive. Among others, Allscripts faces strong competition
from
Cerner Corp.
(
CERN
),
Quality Systems
(
QSII
) and
Athenahealth
(
ATHN
).
However, optimism about the growth prospects of select HCIT
service providers is high under the Obama Administration, which
passed the Stimulus package in May 2009, aimed at increasing the
use of electronic health record ("EHR") systems by medical
practitioners.
The company has widened its user base after its mergers with
Misys and Eclipsys and increased cross-selling opportunities.
We believe that Allscripts is well positioned in the fast growing
business of selling EHR/EMR to physician practices as well as
inpatient settings.
The acquisition of Eclipsys provides the company with an acute
care product for sale in concert with its ambulatory services. We
opine that acute and ambulatory care will continue to converge in
future and that Allscripts is well positioned to provide integrated
clinical applications that will permit health care providers to
satisfy HITECH Act requirements and eventually comply with an
outcomes-based reimbursement system.
Strong bookings currently taking place, with both ambulatory and
acute products doing well, may indicate that the Eclipsys products
are popular in the market and that cross-selling synergies are for
real. Our Outperform recommendation is supported by a short-term
Zacks #2 Rank (Buy).
ATHENAHEALTH IN (
ATHN
): Free Stock Analysis Report
CERNER CORP (
CERN
): Free Stock Analysis Report
ALLSCRIPTS HLTH (
MDRX
): Free Stock Analysis Report
QUALITY SYS (
QSII
): Free Stock Analysis Report
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