AthenaHealth shares dive after 1Q earnings report

Associated Press

Shares of athenaHealth Inc. plunged Friday, a day after the medical clinic billing and records software maker said expenses rose faster than revenue as its first-quarter profit slid.

The Watertown company's performance fell short of Wall Street expectations and received blunt reviews from analysts.

Brean Murray Carret analyst Bret Jones said in a research note the company's "dramatic increase in expenditures was well beyond our expectations."

"The company missed expectations on just about all of the key metrics we monitor," Jones wrote.

Jefferies & Co. analyst Richard Close called the first-quarter performance "disastrous" in a note entitled, "Please Fasten Your Seat Belts Turbulence Ahead."

AthenaHealth earned $277,000, or 1 cent per share, down 82 percent from $1.5 million, or 4 cents per share, a year ago. Revenue rose 33 percent to $54.5 million, but expenses swelled 39 percent to $53.8 million.

AthenaHealth said it expects business to grow and to reach profitability during the last half of the year. It provides medical billing, electronic record-keeping and clinic management services.

Close kept a "Buy" rating on the company but lowered his price target to $35 from $49.

"To get (company) shares moving in the right direction, investors must get comfortable that new wins are imminent," Close wrote. "We are maintaining our rating to see investments start to pay off."

AthenaHealth shares fell $5.85, or 17 percent, to $29.50 in Friday afternoon trading. Earlier in the session the stock traded at $27.85, its lowest point in a year.