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AthenaHealth 1Q profit falls as expenses climb

Thu, 04/29/2010 - 2:30pm
The Associated Press

Medical clinic billing and records software maker athenaHealth Inc. said Thursday that is first-quarter profit fell as expenses rose faster than revenue.

The company reported net income of $277,000, or 1 cent per share, compared with $1.5 million, or 4 cents per share a year ago.

Adjusted net income, which excludes stock-based compensation expenses, direct operating expenses and certain other costs, was $2.3 million, or 6 cents per share, compared with $2.6 million or 8 cents per share.

Analysts expected 13 cents per share.

AthenaHealth's shares rose 83 cents, or 2.4 percent, Thursday to close at $35.35. They fell $4.35 in aftermarket trading after the results were released.

Revenue for the quarter that ended March 31 rose to $54.5 million from $41 million

Expenses climbed to $54.8 million from $38.6 million. The largest increase was in selling and marketing, which rose 72 percent to $12 million. General and administrative expenses increased 42 percent to $11.7 million, including $1 million for an accounting review, the company said.

CEO Jonathan Bush said demand for the company's services is increasing as operating medical clinics' operations become more complex.

"For this reason, it is vital that we drive awareness of athenaHealth higher to take advantage of these opportunities with increased investments in sales and marketing," he said.

The company said it expects business to grow and profitability to come during the last half of the year.

The company, based in Watertown, Mass., provides medical billing, electronic record-keeping and clinic management services.

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