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Allscripts Healthcare Solutions, Inc. (MDRX - Analyst Report) posted a significant fall in adjusted earnings to $2.2 million or a penny per share in the second quarter of 2013 from $23.1 million or 13 cents in the comparable quarter of 2012. With this, earnings also missed the Zacks Consensus Estimate of 7 cents for the quarter.

On a reported basis, Allscripts Healthcare Solutions incurred a loss of $22.9 million or 13 cents per share compared with earnings of $8.0 million or 4 cents in the second quarter of 2012.

Revenues in the quarter ebbed 6.8% to $344.8 million, again missing the Zacks Consensus Estimate of $358 million. The decrease can be attributable to lower revenues generated from all the operating segments.

Adjusted operating income for the quarter slashed 79.2% to $8.6 million from $41.4 million a year ago. Adjusted operating margin fell significantly by 870 basis points (bps) to 2.5% from 11.2% in the second quarter of 2012.

Bookings were $214.1 million in the quarter, the highest quarterly level since the fourth quarter of 2011.  This compared with bookings of $194.1 million in the second quarter of 2012. Contract revenue backlog rose 12.7% from the prior year to $3.2 billion as of Jun 30, 2013.

MDRX derived about 33% bookings from Population Health Management solutions, which comprised of Allscripts Care Management, dbMotion, FollowMyHealth patient portal, Patient Flow, Care Director as well as Allscripts post-acute, decision support and clinical analytics solutions.  These offerings are sold inside as well as outside Allscripts core practice management and Electronic Health Record client base.

Allscripts Healthcare Solutions had cash and cash equivalents of $72.0 million as of Jun 30, 2013, down from $104.0 million as of Dec 31, 2012. Long-term debt (including capital lease obligations) rose to $544.2 million as of Jun 30, 2013 compared with $442.0 million as of Dec 31, 2012. Long-term debt to capitalization ratio increased 290 bps to 28.5% from 25.6% as of Dec 31, 2012.

In the first six months of 2013, cash flow from operating activities more than halved to $50.8 million from $133.4 million in the same period of 2012, mainly driven by lower earnings. Capital expenditure increased 18.1% to $45.7 million compared with $38.7 million a year ago.

Allscripts Healthcare Solutions, a Zacks Rank #4 (Sell) stock, is a leading provider of clinical software and information solutions for physicians. The company serves approximately 180,000 physician practices, 1,500 hospitals, and 10,000 post acute care facilities. It had 5,500 employees with facilities in 24 U.S. states, Canada, India, The Philippines and Middle East.

While we avoid MDRX, other stocks that are performing well in the medical products industry include Hanger, Inc. (HGR - Analyst Report) and Alere Inc. (ALR - Snapshot Report), both with a Zacks Rank #1 (Strong Buy), and Medidata Solutions, Inc. (MDSO - Snapshot Report) with a Zacks Rank #2 (Buy).
 

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