Allscripts Healthcare Solutions, Inc. (MDRX - Free Report) reported third-quarter 2016 earnings of 11 cents per share, a penny above the Zacks Consensus Estimate. The figure also improved from 10 cents in the year-ago quarter.
Revenues increased from $355 million in the year-ago period to $404 million. However this came below the Zacks Consensus Estimate of $415 million.
Software delivery revenues in the quarter totaled $253 million on a GAAP basis and $262 million on a non-GAAP basis, reflecting an increase of 10% and 14%, respectively, year over year.
At the Client services segment, revenue totaled $140 million on a GAAP basis and $142 million on a non-GAAP basis, up 13% and 15%, respectively, year over year.
Gross margin was 42.3% on a GAAP basis and 47.6% on a non-GAAP basis compared with 43.3% and 46.4%, respectively, in the third quarter of 2015.
Total operating expenses, consisting of selling, general and administrative and research and development expenses, were $144 million, reflecting a 4% increase year over year. The increase in operating expense was due to higher expenses from the consolidation of Netsmart.
As of Sep 30, 2016, total cash and cash investments were $77.3 million compared with $116.9 million as of Dec 31, 2015. During the nine-month period ended Sep 30, 2016, the company generated $185 million in cash from operations, marking a 44% increase year over year.
Allscripts provided financial guidance for the fourth quarter of 2016. The projections include non-GAAP revenue between $420 million and $435 million (based on sequential quarterly improvement for Standalone Allscripts and Netsmart), adjusted net EBITDA between $70 million and $80 million, and non-GAAP earnings per share between 14 cents and 16 cents per diluted share.
Zacks Rank & Key Picks
Currently, Allscripts has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical space include Cardiovascular Systems Inc. (CSII - Free Report) , Exelixis, Inc. (EXEL - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . Notably, IDEXX sports a Zacks Rank #1 (Strong Buy) and Exelis and Cardiovascular Systems carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardiovascular Systems represents a stellar one-year return of 68.2%. Notably, the company has an expected long-term growth rate of 22.5%.
Exelis has a stupendous one-year return of almost 152.9%. In the last reported quarter, the company registered an impressive earnings surprise of 40.74%.
IDEXX Laboratories represents a promising one-year return of 54.2%. The company has a long-term expected growth rate of almost 14.8%.
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