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Athenahealth Falls After Earnings Forecast Misses Estimates

Athenahealth Inc., which sells electronic health records to doctors, declined the most since April 2010 after its 2012 earnings projection missed analysts’ estimates.

Athenahealth forecast adjusted earnings of 85 cents to 97 cents at an investor meeting in Watertown, Massachusetts, where the company is based. The average estimate of 22 analysts surveyed by Bloomberg was $1.13. The shares fell 15 percent to $49.04 at 4 p.m. New York time.

“It’s a classic case of something running pretty hot into the analyst day and people being disappointed,” said Constantine Davides, an analyst with JMP Securities LLC.

Athenahealth makes electronic health records that physicians use to manage their practices and track patients. Revenue has increased at least 30 percent a year since 2006. The company will have to invest next year to continue to grow, which will push down margins, said Chief Financial Officer Tim Adams.

“Our fiscal year 2012 expectations are consistent with our long-standing goals to grow revenue by at least 30% annually and to invest wisely in growth and innovation,” Adams said today in a statement ahead of a company investor conference.

The drop in today’s share price may not be warranted when results come in over the next year, Davides said.

“Folks need to keep in mind that this is a conservative management team,” Davides said in a telephone interview. Adams may be setting low “expectations in the event that business conditions change, or they want to make investments they may not have seen at the beginning of the year,” he said.

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