Allscripts-Misys Healthcare Solutions, Inc. (MDRX) reported third quarter fiscal 2010 earnings per share of 17 cents, beating both the Zacks Consensus Estimate and the year-ago earnings of 14 cents. Sales Total revenues in the third quarter increased 11.9% year over year to $179.9 million. Non-GAAP revenues in the reported quarter increased 16.2% year over year to $180.4 million. Non-GAAP revenues in the third quarter of fiscal 2010 included a deferred revenue adjustment. Non-GAAP revenues in the third quarter of fiscal 2009 included a deferred revenue adjustment and elimination of prepackaged medications revenue that the company disposed off in March 2009. Growth was registered across all business segments. Maintenance sales increased 10.7% year over year to $62.1 million. Transaction processing and other revenues increased 6.6% year over year to $56.3 million. System sales increased 60.9% year over year to $44.1 million. Professional services revenues increased 9.4% year over year to $17.4 million. Total bookings for the quarter were $105.5 million, an increase of 25% year over year. Margins Gross margin in the reported quarter increased 470 basis points (bps) year over year to 56.5%. Non-GAAP gross margin increased 210 bps year over year to 56.6%. Selling, general and administrative (SG&A) expenses as a percentage of sales increased 70 bps year over year to 30.4%. Research and development (R&D) expenses as a percentage of sales increased 80 bps year over year to 7.0%. Higher gross margin offset an increase in operating expenses and resulted in a higher operating margin that increased 350 bps year over year to 17.7%. Balance Sheet & Cash Flow Allscripts ended the third quarter with cash and cash equivalents of $115.8 million, an increase of 62.6% in the first nine months of fiscal 2010. The company had an outstanding long-term debt of $14.0 million at the end of the third quarter. Cash flow from operations was $46.5 million for the quarter.Outlook Allscripts raised its revenues and earnings guidance for fiscal 2010. For the year, revenues are expected between $700 and $705 million, compared to the previous guidance of $680 to $700 million. GAAP earnings per share should be in the range of 44 to 45 cents, versus the previous guidance of 41 to 43 cents. Non-GAAP earnings per share should be between 64 and 65 cents, compared to 61 to 63 cents in the previously issued guidance. Libertyville, IL-based Allscripts Healthcare Solutions Inc. is a leading provider of clinical software and information solutions meant for physicians. In October 2008, the company merged with Misys Plc, a global applications software and services company, to form Allscripts−Misys Healthcare Solutions Inc. Allscripts faces strong competition from Cerner Corp. (CERN), Merge Healthcare Inc. (MRGE), Quality Systems Inc. (QSII) and MedAssets Inc. (MDAS). Presently, we are ‘Neutral’ on Allscripts.
updated Apr 08, 2010
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