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Allscripts (MDRX) Q2 Earnings and Revenues Beat Estimates

Zacks Equity Research

Allscripts Healthcare Solutions, Inc. MDRX reported second-quarter 2020 adjusted earnings per share (EPS) of 18 cents, which beat the Zacks Consensus Estimate of 12 cents by 50%. The bottom line also rose 5.9% on a year-over-year basis.

Revenue Details

Revenues totaled $406.2 million, which beat the Zacks Consensus Estimate by 1.6%. However, the top line fell 8.8% year over year.

For second-quarter 2020, bookings came in at $188 million, down 31.9% from the prior-year quarter.

Segment Details

The Provider segment consists of core integrated clinical software applications, financial management and patient engagement solutions targeted at clients across the entire continuum of care. Meanwhile, the new Veradigm segment primarily focuses on the payer and life sciences market.

Software delivery, Support and Maintenance

In the quarter under review, revenues at the segment amounted to $256 million on a reported basis, down 10.2% from the year-ago quarter's tally.

Client Services

At this segment, revenues totaled $150.2 million, down 5.8% from the year-ago quarter's figure.

Margins

Gross profit in the second quarter was $164.4 million, down 10.7% from the year-ago quarter. Gross margin was 40.5%, down 94 basis points (bps) from the year-ago figure.

Adjusted operating profit in the reported quarter was $2 million, down 89.4%. Adjusted operating margin was 0.4%, a contraction of 300 bps.

 

Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise

 

Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise
Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise

Allscripts Healthcare Solutions, Inc. price-consensus-eps-surprise-chart | Allscripts Healthcare Solutions, Inc. Quote

Financial Update

The company exited the second quarter of 2020 with cash and cash equivalents totaled $199 million, down from $204.3 million at the end of first quarter.

At the end of the second quarter, cumulative net cash provided by operating activities totaled $19 million against cumulative net cash used of $1.9 million at the end of the year-ago period.

2020 Guidance

Allscripts did not provide any quarterly or full-year 2020 guidance.

Summing Up

Allscripts ended the second quarter on a strong note. The company maintained momentum in its Provider business on the back of key client wins. It is confident about its near and long-term outlook as it expects to benefit from a number of differentiated opportunities in its Provider and Veradigm businesses.

The company’s second-quarter results showed resilience as the company together with  its clients continued to navigate through the COVID-19 pandemic. During this uncertain period, Allscripts managed to leverage both new and existing innovative solutions to help clients and boost patient outcomes.

Meanwhile, the company witnessed a decline in its core Client Services and Software delivery unit revenues during the second quarter. Also, the company’s bookings declined year over year in the quarter. Allscripts is exposed to integration risks. Intense competition in the niche space is also a concern.

Zacks Rank and Key Picks

Allscripts currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. TMO, PerkinElmer, Inc. PKI and OPKO Health, Inc. OPK. While OPKO Health carries a Zacks Rank #2 (Buy), the other two sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

OPKO Health reported second-quarter 2020 EPS of 5 cents against the Zacks Consensus Estimate of a loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.

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