The stock price of Allscripts Healthcare Solutions fell 5.6 percent at the open of trading on May 10 as the software vendor announced first quarter 2013 results that significantly missed investment analyst expectations.
The stock was down in the single digits throughout the trading day on heavy trading, then rallied toward the end to close at $13.47 per share, down 2.7 percent. The company had a net loss of $11.6 million compared with income of $5.8 million during the first quarter of 2012. Adjusted earnings per share was 9 cents, missing an analyst consensus of 14 cents. First quarter revenue of $347.1 million was down 4.8 percent from the previous year and missed expectations of nearly $368 million.
During the first quarter, system sales fell 27.4 percent compared with a year ago, professional services revenue was down 14.5 percent, maintenance fees were about flat and transactions processing and related fees increased 2.6 percent. “We are investing heavily in both our clients and our products and so while our financial results for the quarter are not surprising, they are not satisfactory and not indicative of our long-term potential,” CEO Paul Black said in a statement announcing the results. “This is a rebuilding year for Allscripts and I remain confident we are taking the right steps forward.” In a conference call with investors, Black noted that client retention has remained relatively stable during the past year.
Expenses and adjustments during the quarter included acquisition-related deferred revenue adjustments of about $900,000, acquisition-related amortization expenses of $16.2 million, stock-based compensation expenses of $8 million, severance and other costs primarily from office consolidation of $12.6 million, costs of sunsetting the MyWay product line of $6.2 million, and $2 million in transaction costs related to the acquisitions of dbMotion and Jardogs. The company expects more than $50 million in annual savings from operational effectiveness initiatives, such as consolidation of offices, starting in 2014.
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