The stock price of athenahealth Inc. rose more than 22 percent on July 23 after the physician software and services vendor reported second quarter financial results that exceeded analyst expectations.
Watertown, Mass.-based athenahealth is a vendor of outsourced billing and collections services bundled with Web-based practice management and electronic health records software. Revenue for the second quarter rose 28 percent to $58.6 million. Net income for the quarter actually fell to $1.3 million compared with $2.2 million during the same period a year ago as marketing and sales, research and development, and general and administrative expenses rose faster than revenue. However, earnings per share of 12 cents excluding charges beat expectations by 2 cents.
For the first half of 2010, net income fell to $1.6 million compared with $3.8 million during the same period last year, while revenue increased 30 percent to $113 million.
The company predicted third quarter revenue growth of at least 30 percent, but backed down on earlier expectations of similar growth in the fourth quarter because of "the lighter than expected physician office activity our clients are experiencing," according to a statement. Still, athenahealth expects 29 percent to 30 percent growth in total revenue during 2010.
The Robert. W. Baird & Co. investment firm upgraded the stock from "neutral" to "outperform." More information is available at athenahealth.com.
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