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Athenahealth rises following 2013 outlook

NEW YORK (AP) -- Shares of Athenahealth Inc. climbed Thursday after the electronic health record and medical practice management company issued its first guidance for 2013 suggesting continued double-digit growth.

THE SPARK: Athenahealth said late Wednesday it is forecasting adjusted income of $1.15 to $1.25 per share on revenue of $525 million to $550 million. The midpoint of the ranges are a bit below Wall Street estimates, as FactSet reports that analysts expect the company to earn $1.28 per share on revenue of $542.2 million, on average.

The Watertown, Mass., company also narrowed its income and revenue guidance for 2012. It is now forecasting net income of 95 cents to $1 per share for the year, compared to its previous estimate of 90 cents to $1 per share. Athenahealth said it now expects $420 million to $425 million in revenue, down from $425 million to $430 million.

THE BIG PICTURE: While the company's 2013 outlook doesn't quite meet Wall Street expectations, Athenahealth is predicting continued growth. Its revenue rose 32 percent in 2011 and its current guidance calls for growth of about 30 percent in 2012. The new outlook suggests improvement of 27 percent next year.

THE ANALYSIS: Citi Investment Research analyst George Hill said the company's operating margins will decrease in 2013 because of greater spending, but Athenahealth believes an increase in spending is necessary to sustain its revenue growth. Hill said the guidance matches his expectations and maintained a "Buy" rating on Athenahealth shares.

Sterne Agee analyst Greg Bolan kept an "Underperform" rating, saying he thinks the company will probably have to cut its estimates in 2013, as it lowered its 2012 revenue estimates twice this year.

SHARE ACTION: Athenahealth stock jumped $6.46, or 10 percent, to $72.17. The shares are down 18 percent since Athenahealth reported its third-quarter results on Oct. 18, and the stock has fallen 28.4 percent since Sept. 28.