Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: covan Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 63  
Subject: Eclipsys Q3 '03 results & call Date: 10/27/2003 9:12 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Eclipsys (ECLP) reported third quarter earnings in a press release on October 20. Concurrently, they reported “response time issues” with the Sunrise XA product, along with a $1.2 Million “impairment charge” related to the problem.

The company reported their strongest revenue quarter ever, up over 43% year over year and 7.6% Q over Q. There was a loss of $.24 per share, 3 cents worse than expected. This was due entirely to the impairment charge.

Investors reacted with characteristic thoughtfulness, dumping more than 5 million shares at prices as much as 40% lower than the previous day's close, and whacking off a quarter of a billion dollars of market cap.

The response time issue is quite serious, but confined to the Sunrise XA workflow engine. Currently there are 36 Sunrise XA systems in implementation and 2 that are already live. The company says the problem is an architecture issue with the XA client, and not Microsoft .NET related. Their strategy will be to temporarily replace the XA workflow engine with the older SCM 3.04 engine, which is currently live in over 100 accounts. This component is tried and true, and performs all the same functions - it just isn't web enabled. The company hopes that this strategy will allow XA customers to continue with their development until the problem is corrected.

If Eclipsys can keep their XA customers reasonably happy and report solid progress on correcting the problem soon, there should be little impact on revenues going forward. To the extent that the problem results in lost sales, it could have an impact on current bookings and future revenue.

Like most investors, I was very disappointed with the announcement of the response time problem. But I think that openly acknowledging the problem, as they have done, is the best course of action. I was impressed with the ensuing conference call, in which the CEO, COO, CFO, and CTO patiently explained their strategy and fielded every question thrown at them by the analysts. It's a setback, but not one that they can't recover from.

Fred
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Economic Implications of Cuba
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement