Eclipsys Corporation (ECLP) reported fourth-quarter earnings of 17 cents (excluding special items), above the Zacks Consensus Estimate of 8 cents as well as the year-ago earnings of 7 cents (excluding special items).
Quarterly results
Total revenues (inclusive of $2.03 million from premise acquisition accounting) for the reported quarter came in at approximately $135.7 million as opposed to $126.8 million in the year-ago quarter, up 7%. Segment-wise revenues from systems and services (inclusive of $2.03 million from premise acquisition accounting) climbed 7.5% to $131.8 million from last year. Hardware revenues declined 6.8% to $3.9 million from the year-ago quarter.
The revenues from systems and services for the quarter included recurring revenues (inclusive of $0.067 million from premise acquisition accounting) of $92.7 million, up 8.7% year-over-year, professional services revenues (inclusive of $0.218 million from premise acquisition accounting) of $26.4 million down 6.7% and periodic revenues (inclusive of $1.745 million from premise acquisition accounting) of $12.7 million, up 41.2% year-over-year.
The company reported a gross profit (after adjustments) of approximately $62.92 million in the reported quarter as against $54.16 million (post adjustments) in the year-ago quarter. Operating expenses in the quarter (post adjustments) came in at $47.4 million as against approximately $50.3 million (post adjustments) in the year-ago quarter.
Eclipsys exited the quarter with approximately $123.2 million in cash and $86 million in long term investments. Furthermore, the company repaid $31 million on its credit facility during the quarter; thereby, reducing its long-term debt to $29 million as of Dec 31, 2009.
Yearly Results
Eclipsys Corporation earned 64 cents (excluding special items) per share in fiscal 2009, well above the Zacks Consensus Estimate of 38 cents but below the 2008 earnings of 75 cents (excluding special items).
Total revenues (inclusive of approximately $8 million from premise acquisition accounting) for the year came in at approximately $527.2 million as opposed to $515.8 million in 2008, up 2.2%. Segment-wise revenues from systems and services (inclusive of $7.87 million from premise acquisition accounting) climbed 4.3% to $516.9 million from last year. Annual hardware revenues (inclusive of $.13 million from premise acquisition accounting) declined approximately 49% to $10.3 million from 2008.
Revenues from systems and services for fiscal 2009 included recurring revenues (inclusive of $0.949 million from premise acquisition accounting) of $361 million, up 8% year-over-year, professional services revenues (inclusive of $1.3 million from premise acquisition accounting) of $112.1 million down 9.8% and periodic revenues (inclusive of $5.6 million from premise acquisition accounting) of $43.8 million, up 18% year-over-year.
The company reported a gross profit (after adjustments) of approximately $248.6 million in 2009 as against $227.8 million (post adjustments) in 2008. Operating expenses in 2009 (post adjustments) came in at $191.9 million as against approximately $188.8 million (post adjustments) in 2008.
Outlook for 2010
Eclipsys expects revenue for full year 2010 to grow at the rate of 6% to 8%. Furthermore, the company expects earnings (excluding special items) between 70 cents and 75 cents per share. The Zacks Consensus Estimate for 2010 is 50 cents.
Estimate Revisions Trend
Even though we have not witnessed revisions in earnings estimates from any of the 9 analysts covering the stock for the next quarter over the last 30 days the encouraging results in the fourth quarter of 2009 have prompted us to assign a Buy rating (Zacks Rank # 2) in the short-term. Although we expect the stock to outperform the overall U.S. equity market over the next one to three months and recommend Eclipsys to investors over the time period our long-term recommendation on the stock remains Neutral.
Over the last 30 days, only 1 out of the 12 analysts covering the stock for fiscal 2010 lowered estimates while none moved in the opposite direction. This implies that majority of the analysts following the stock have not revised earnings estimates and there is no directional pressure on the performance of the stock in the upcoming quarters. As a result, our long-term recommendation on the stock remains Neutral. This means that we expect the stock to perform in line with the overall U.S. equity market over the next 6 to 12 months and recommend investors to retain the stock over the time period.
The announcement of the encouraging results, after market close on Feb 18, 2010, caused the company’s shares to rise approximately by 3% in after-hours trading. Eclipsys had closed the day (Feb 18, 2010) at $16.97 on the Nasdaq.
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