Computer Programs and Systems falls on Q2 profit decline
Shares of Computer Programs and Systems, Inc. (Nasdaq: CPSI) are trading in negative territory following news of a second-quarter profit decline.
The net income for the period ended June 30 was $3.3 million, or $0.31 per share, 19.2% lower compared with a net income of $4.1 million, or $0.38 per share, during the same three-month period of 2006, the Mobile, Ala.-based healthcare information technology company announced after Thursday’s close.
Revenues also took a hit, falling 3.5% to $28.0 million, compared with $29.0 million during the second quarter of 2006.
“The earnings miss was driven by weak systems sales margins,” said Ben Green, an analyst with investment bank Avondale Partners, LLC. “[Computer Programs and Systems] had a higher mix of hardware sales, versus software license sales, which have a greater margin.”
Looking ahead, the company forecast total revenues of $27.0 million to $28.5 million for the third quarter. That’s below the $30.68 million expected by eight analysts surveyed by Thomson Financial.
Third quarter profit is also projected short of Wall Street’s view. Computer Programs and Systems said that it anticipates net income between $2.9 million and $3.1 million, or $0.27 to $0.29 per share, while analysts were looking for earnings of $0.42 per share.
Sales to rural and community hospitals with under 100 beds make up over 90% of Computer Programs and Systems’ business.
At 11:27 a.m. ET the stock was down $1.57, or 5%, to $28.97. The 52-week high of $38.71 was achieved on July 20, 2006. The 52-week low of $25.80 was set on March. 14.
