Allscripts, Inc. (Nasdaq: MDRX) plunged 7 1/4 to 8 7/8 Friday after the company’s third-quarter financial report and a downward revision to second-quarter results sparked a series of analyst downgrades.
The Chicago, Illinois-based Internet prescription and health-services provider reported a loss before items of $5.6 million, or 19 cents per share, for the third quarter. Revenue totaled $14.8 million, up 111 percent from a year earlier and 22 percent above the second quarter.
However, the company revised its second-quarter results lower, saying $500,000 in revenue for services provided to IMS Health, Inc. should not have been included. Revenue for the quarter totaled $12.1 million, not $12.6 million as originally reported, resulting in a bigger net loss for the quarter.
Allscripts said it expects to record $1.5 million from the IMS agreement in the fourth quarter, instead of accounting for $500,000 in each of the second, third and fourth quarters as originally expected. The company said its relationship with IMS “remains strong,” and that the issue is a bookkeeping one.
“Overall, we had a solid quarter, with revenue from both traditional and e-commerce sources rising substantially as our momentum in the marketplace continues to accelerate,” said chief executive officer Glen Tullman.
E-commerce revenue, at $9.7 million, was up 234 percent in the third quarter from a year earlier and up 36.6 percent from the second quarter. The company posted a net loss of $15.2 million, or 52 cents per share, compared with $4.8 million, or 28 cents, a year earlier.
Analysts at U.S. Bancorp Piper Jaffray, Bear Stearns, Friedman Billings and A.G. Edwards all reportedly cut their ratings on Allscripts following the news.