Athenahealth Inc. (NSDQ:ATHN) saw its second-quarter profits plunge on a June Medicare reimbursement hold and rising expenses, despite a 28 percent uptick for its Q2 top line.
The Watertown, Mass.-based electronic medical records provider reported net income of $1.3 million, or 4 cents per diluted share, on sales of $58.6 million during the three months ended June 30. That’s a 42.2 percent decline in net income; the company posted profits of $2.2 million, or 6 cents per diluted share, on sales of $45.6 million during Q2 2009.
The bottom-line slide was largely fueled by higher expenses, which rose 32.8 percent to $55.7 million during the quarter, up from $41.9 million during the year-ago period. Second quarter expenses were 95.1 percent of total revenues, compared with 91.8 percent of total revenues during the second quarter last year.
A 21 percent reimbursement rate cut Medicare put into effect in June, which was rolled back later that month, didn’t help either: CFO Tim Adams said the hold shifted $1 million in revenues from the second quarter into the third.
Athenahealth lowered its annual revenue growth forecast, Adams added, "due to the lighter-than-expected physician office activity our clients are experiencing." The company now expects 29 percent to 30 percent revenue growth for the full year.
ATHN shares closed June 22 at $22.06, down 1.8 percent.
