Allscripts-Misys Healthcare Solutions, Inc.

Allscripts-Misys Healthcare Solutions, Inc.'s (MDRX - Analyst Report) share price has been on a nice rally since late October, as the company believes it is well positioned to capitalize on the Obama administration's desire to advance information technology within the healthcare sector.

Company Description

Allscripts-Misys Healthcare Solutions, Inc. provides software and technology service solutions to physicians and healthcare providers to deliver patient safety and clinical outcomes in the United States. The company was founded in 1986 and has a market cap of $1.17 billion.

Second-Quarter Results

Allscripts reported second-quarter results on Jan 8 that were ahead of analyst estimates when stripping out one-time items. Sales were up 33% from last year to $128.6 million.

When excluding one-time items due to the company's merger with Misys Healthcare, income would have come in at $16.8 million, far ahead of last year's $5.5 million. This would have produced earnings of 14 cents, ahead of estimates by 2 cents.

A Merger To Drive Growth

In March of 2008, Allscripts and Misys announced a merger in which Misys paid $330 million in cash to Allscripts for a 54.5% stake in the combined company. Allscripts was slated to pay a special one-time dividend of $330, or $4.90 per share, to Allscripts shareholders.

CEO Speak

Allscripts CEO Glen Tullman provided some texture to the company's performance, saying that, "Our results this quarter reflect the early success of the merger of Allscripts and Misys Healthcare and our solid operating performance as a company."

The company also believes it stands to benefit from the Obama Administration's desire to modernize healthcare information technology, with Mr. Tullman adding that, "We expect the Obama Administration's focus on healthcare information technology to drive exciting new opportunities."

Analyst Estimates

With optimism abound, the analyst community has responded accordingly. The next-year estimate stands at 58 cents per share, a 27% earnings growth projection.

The Chart

Shares of MDRX have been steadily advancing from just below $5 in late October to their recent high of over $10, where some short-term resistance has developed.