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Merge Healthcare Beats on Both Top and Bottom Lines

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August 13, 2012 | Comments (0)

Merge Healthcare (Nasdaq: MRGE  ) reported earnings on Aug. 6. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), Merge Healthcare beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP loss per share improved.

Margins contracted across the board.

Revenue details
 Merge Healthcare tallied revenue of $62.9 million. The four analysts polled by S&P Capital IQ predicted a top line of $60.1 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $55.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.02. The four earnings estimates compiled by S&P Capital IQ predicted $0.01 per share. GAAP EPS were -$0.06 for Q2 compared to -$0.04 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 59.6%, 1,090 basis points worse than the prior-year quarter. Operating margin was 10.0%, 1,030 basis points worse than the prior-year quarter. Net margin was -9.4%, 640 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $63.1 million. On the bottom line, the average EPS estimate is $0.03.

Next year's average estimate for revenue is $252.8 million. The average EPS estimate is $0.10.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 111 members out of 130 rating the stock outperform, and 19 members rating it underperform. Among 28 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Merge Healthcare a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Merge Healthcare is outperform, with an average price target of $5.00.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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