SXC Health Solutions, Corp. (SXCI, SXC.TO), a provider of pharmacy benefit management, or PBM, services and healthcare information technology solutions, Thursday reported a surge in its second-quarter profit, reflecting strong revenue growth in its PBM business. The company also lifted its fiscal 2009 outlook.
SXC's second-quarter net income was US$11.98 million or US$0.47 per share, compared with US$3.27 million or US$0.14 per share in the year-ago quarter.
Non-GAAP earnings, excluding NMHC transaction-related amortization were US$13.30 million or US$0.53 per share, compared with US$0.21 per share last year.
SXC also reported quarterly revenue of US$320.83 million, up from US$227.76 million in the year-ago quarter.
On average, analysts polled by Thomson Reuters expected the company to report earnings of US$0.20 per share for the quarter on revenues of US$300.97 million. Analysts' estimates typically exclude special items.
Commenting on the results, Mark Thierer, president and chief executive officer of SXC, stated, "Driven by new contract wins, strong client retention, cross-sell selling success and operational synergies, we generated record sales and profitability in the second quarter."
PBM revenue for the quarter was US$293.91 million, up from US$204.86 million in the previous year. HCIT revenue rose to US$26.92 million from US$22.9 million a year ago.
Recurring revenue consisted of transaction processing revenue of US$15.7 million, higher than US$11.9 million in the same quarter last year. Maintenance revenue rose to US$4.5 million from US$4.1 million a year earlier.
Recurring revenue accounted for 75% of HCIT revenue in the second quarter, compared to 70% in the prior-year quarter.
Non-recurring revenue consisted of professional service revenue of US$3.8 million, higher than US$3.1 million in the second quarter of 2008. System sales revenue declined to US$3 million from US$3.8 million in the previous year.
For the first half of fiscal 2009, the company's net income was US$19.66 million or US$0.79 per share, significantly higher than US$6.62 million or US$0.29 per share in the prior-year period. Revenue climbed to US$611.79 million from US$252.07 million in the same period last year.
Among others in the sector, Cerner Corp. (CERN) has reported an increase in its profit for the second quarter despite revenues being virtually flat with last year. The Kansas City, Missouri-based company's net earnings increased to $44 million from $35.30 million in the prior-year quarter. Revenues were $403.81 million, compared with $402.80 million last year. For fiscal 2009, the company now expects GAAP earnings per share in the range of US$1.42-US$1.50, compared with its prior estimate range of US$0.93 - US$1.01. Non-GAAP adjusted earnings per share are now projected to be between US$1.62 and US$1.70 versus its prior estimate range of US$1.13 - US$1.21. The company also sees revenues of US$1.35 billion to US$1.4 billion, up from its earlier estimate of US$1.25 billion- US$1.35 billion.
Analysts expect the company to report earnings of US$1.00 per share on revenues of US$1.29 billion for fiscal 2009.
SXCI closed Wednesday's trading at US$29.70 on the Nasdaq. In pre-market trading, the company's shares dropped US$0.15 to US$29.75.
On the TSX, SXC.TO ended Thursday's trading at C$31.60.
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