Shares of Pro Medicus Limited (ASX: PME) have continued to fall today after the medical software provider released its full-year earnings results to the market on Friday. The shares fell 4.8% following the results release while they're down another 7.5% today at just $1.85.
So What: The local sharemarket's major sell-off is no doubt playing a role in the market's negative reaction to Pro Medicus' results, although it is also possible that investors found something off-putting in the company's announcement.
The group's revenue grew 21.7% to $17.58 million for the year while its profit more than doubled to $3.22 million. It said that the key driver of the profit increase was a significant improvement from its North American operations with the increase in sales having a positive impact on overall profitability (due to the fact most of its costs are fixed).
Indeed, revenue from North America increased 67.2% compared to the 2014 financial year with the falling Australian dollar also playing a major role in the improved financial performance.
The stock's fall could be attributed to an announcement by the group's CEO, Sam Hupert, who said that a major $20 million operating contract signed last year had not been fully implemented as yet.
Although it had a positive impact on revenue in the second-half of FY15, "the full contribution to revenue and earnings won't come through until we've fully implemented Visage 7 across that network." That is now expected to be in the second half of FY16, which is later than the market anticipated.
Now What: Although the market was clearly unimpressed by the delay, long-term investors could certainly look to take advantage of the temporary disappointment and the discounted price – especially if the broader sharemarket continues its sharp decline.
