(RTTNews) - Athenahealth, Inc. (ATHN: News ), a provider internet-based business services for physician practices, Thursday reported a decline in profit for the third quarter, despite a rise in revenues, due mainly to higher income tax provision.

Net income for the third quarter declined to $2.11 million or $0.06 per share from $3.70 million or $0.11 per share in the previous year. Results for the quarter include acquisition related expense of $651 thousand, loss on interest rate derivative contract of $125 thousand and stock-based compensation expenses of $2.12 million.

On an adjusted basis, net income was $4.99 million, compared to $4.82 million a year ago. Per share earnings remained flat at $0.14 per share with last year. On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share. Analysts' estimates typically exclude special items.

Total revenue for the quarter increased 37% to $48.69 million from $35.43 million last year and topped analysts' estimate of $48.67 million.

Business services revenue rose to $45.61 million from $33.08 million in the previous year. Implementation and other revenue increased to $3.08 million from $2.35 million last year.
Total expenses for the quarter increased to $44.19 million from $32.02 million a year ago. Income tax provision rose to $2.30 million from $0.08 million in the previous year following the reversal of a valuation allowance against U.S. deferred tax assets in the fourth quarter of 2008.

The company noted that it has posted $1.2 billion in collections to client accounts in the third quarter of 2009, compared to $0.9 billion in the same quarter of 2008.

For the nine-month period, net income declined to $7.48 million or $0.22 per share from $8.31 million or $0.24 per share in the same period of the previous year. Total revenue for the period increased to $137.51 million from $98.16 million a year ago.

ATHN closed Thursday's regular trading at $36.25, up 0.50 or 1.40%, on a volume of 702K shares on the Nasdaq. In after hours, the stock went down 1.00 or 2.76%, trading at $35.25.

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by RTT Staff Writer

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