NEW YORK (AFX) - Eclipsys Corp. said Thursday it posted a profit for the second quarter, but the results fell below Wall Street expectations.
The health care information technology provider also reduced its 2006 forecast because of fewer-than-expected software license sales.
Shares of the Boca Raton, Fla.-based company fell $5.22, or 27 percent, to $14.41 in afternoon trading on the Nasdaq Stock Market. Shares traded as low as $13.86, below the 52-week low of $15.38 set Oct. 24.
The company earlier Thursday said it earned $1.15 million, or 2 cents a share, on revenue of $102.3 million in the second quarter.
Excluding restructuring charges and the cost of accounting for stock-option payments, earnings were 11 cents a share.
Analysts were expecting earnings of 11 cents a share.
In the same period a year earlier, it lost $2.49 million, or 5 cents a share, on revenue of $95.9 million.
The seller of clinical, financial and management information software and services to hospitals and clinics lost two software contracts in the second quarter, President and Chief Executive R. Andrew Eckert said in a conference call.
Chief Financial Officer Robert Colletti added that software license fees were below internal targets, hurting second-quarter results.
Colletti said in the call that the company plans to focus on software license sales for the rest of the year.
Eclipsys now expects 2006 per-share earnings between 13 cents and 19 cents, or 52 cents and 58 cents excluding certain items. That's below its previous forecast of per-share earnings before items of 58 cents to 64 cents.
Analysts were expecting earnings of 59 cents a share on revenue of $435 million, according to Thomson Financial.
Eclipsys lowered its revenue range to between $422 million and $432 million, down from its earlier forecast of $430 million to $440 million.
George Hill, an analyst at Leerkin Swann, said Eclipsys has fallen behind competitors, which have focused more on products for outpatients. Those products have been driving the market over the past year, he said.
Hill does not own any Eclipsys shares; his company makes a market in the stock.
A change in the way Eclipsys' sales force earns commissions should boost sales in the second half of the year, said Richard Close, an analyst at Jefferies & Co. He does not own any Eclipsys shares, but his company makes a market in the stock.
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