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Athenahealth surges on stronger-than-expected 4Q

NEW YORK (AP) — Shares of Athenahealth climbed Friday after the company's fourth-quarter results surpassed Wall Street's forecasts.

THE SPARK: Athenahealth provides online health-record and medical-practice services. It said its net income rose to $13.1 million, or 34 cents per share, from $5.9 million, or 16 cents per share. The Watertown, Mass., company said it earned 57 cents per share if one-time item charges and gains are excluded. Its revenue grew 48 percent to $171.6 million.

FactSet says analysts expected net income of 44 cents per share on $168.4 million in revenue.

THE BIG PICTURE: Athenahealth Inc.'s sells the billing product athenaCollector, athenaClinicals practice-management software, and athenaCommunicator software. The company also bought medical app maker Epocrates in 2013.

Excluding one-time charges the company said its annual net income grew to $1.16 per share from $1 per share, and revenue increased 41 percent to $595 million.

THE ANALYSIS: Analyst Ryan Daniels of William Blair & Co. called the quarter "a reversal from the last several quarters where both sales and earnings were modestly shy of expectations." He said Athenahealth's profit margins improved and revenue from its Epocrates business picked up, and growth for athenaCollector and athenaClinicals was better than excepted.

He rates the stock "Market Perform."

SHARE ACTION: Athenahealth shares surged $37.92 or 27 percent, to $176.76 in afternoon trading. The stock has been trading around all-time highs for almost a year, and it peaked at $177.79 Friday. With Friday's gains, the shares are up almost 70 percent since Athenahealth reported its third-quarter results in October.

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