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by David Gibbs

After delaying its last earnings announcement, previously scheduled for February 25th, Athenahealth, Inc. (NASDAQ:ATHN) finally reported Q4 earnings Monday after the bell. The leading provider of Internet-based healthcare services announced in-line EPS results of $0.17/share and a slight revenue of miss of $54.4 million vs. $55 million consensus estimates. Shares are trading up during the after-hours session following the news.

ATHN originally delayed its earnings release because the company decided to revise its accounting practices for deferred implementation revenue. The changes resulted in a recognition of applicable revenues over their 12-year expected life, rather than over the typical one-year initial contract recognition term. As a result, ATHN restated its results from 2005-2009.

After the accounting realignment, Q4 profits were down 84% year-over-year, but investors seemed to be focusing on the silver linings of the report, pushing shares higher. Among said linings were total subscriber numbers, as the number of active medical providers using the athenaCollect and athenaClinical services increased 24% and 84% year-over-year, respectively. Also, collections posted to client accounts increased to $1.4 billion from $1.1 billion for the same quarter last year. Total client days in accounts receivable fell from 44 to 38.5.

This led CEO (and 1st cousin of George W. Bush) Jonathan Bush to exclaim that he was “very proud of [ATHN's] accomplishments in 2009, a year in which we…strengthened our unique value proposition with a patent issued on our payer rules engine, and stepped up our investments in growth by acquiring Anodyne Health Partners.” He added that, “as physicians face increasing complexity associated with payment reform and incentive programs, I continue to believe that our unique approach as a software-enabled-service will deliver superior results to both physicians and investors.”

Overall, ATHN’s Q4 results definitely came as good news to shareholders. After announcing the earnings delay, several law firms began investigating bases for lawsuits and shares gapped down, as you can clearly see below. Since then, shares traded as low as $35.13 before rallying up to $39.50 and then nearly testing those lows again Monday leading into the report. Shares closed out the after-hours session at $39.45, up 5.79%, and seem set to challenge their post-delay highs. If they can break through, there is not much standing in their way up to $43. If you’re looking for something longer-term, ATHN is definitely worth a look at these levels, as the selloff following the earnings delay is not something that will affect ATHN’s long-term value. The healthcare industry seems to have bought into digitalization of records, and ATHN is likely to see continued long-term growth as a result.

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Disclosure: No holdings in ATHN.

Source: Athenahealth's Q4 Results Come as Good News to Shareholders