Free Research Report as Cerner’s Revenue Jumped 8% and EPS Advanced 6.1%

Stock Monitor: Inovalon Post Earnings Reporting

LONDON, UK / ACCESSWIRE / November 28, 2017 / Active-Investors’ free earnings report on Cerner Corp. (NASDAQ: CERN) has freshly been issued to its members. You can also sign up to view this report at www.active-investors.com/registration-sg/?symbol=CERN. The Company reported its third quarter fiscal 2017 operating results on October 26, 2017. The healthcare information technology Company’s revenue and earnings fell short of market expectations. Register today and get free access to our complimentary member’s area, where many more reports are available: www.active-investors.com/registration-sg.

Active-Investors.com is currently working on the research report for Inovalon Holdings, Inc. (NASDAQ: INOV), which also belongs to the Technology sector as the Company Cerner. Do not miss out, become a member today for free to access this upcoming report at: www.active-investors.com/registration-sg/?symbol=INOV.

Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Cerner’s most recent news is on our radar and we have decided to include it in our blog post. Today’s free coverage is available at: www.active-investors.com/registration-sg/?symbol=CERN.

Earnings Highlights and Summary

Cerner’s (NASDAQ: CERN) bookings were $1.11 billion in Q3 2017, down from $1.43 billion in Q3 2016, and below the Company’s guidance, due to a delay in several large contracts that were projected to be signed in the reported quarter. Cerner is expecting most of them to be signed in Q4 2017.

For Q3 2017, Cerner’s revenue was $1.28 billion, reflecting an increase of 8%, compared to $1.19 billion in Q3 2016, and within Company’s guidance range. Cerner’s revenue numbers were below Wall Street’s estimates of $1.29 billion.

During Q3 2017, Cerner’s GAAP operating expenses grew 9% to $825 million, compared to $759 million in Q3 2016. The Company’s adjusted operating expenses were $779 million in the reported quarter, up 9% on a y-o-y basis, and primarily driven by an increase of personnel expenses related to revenue-generating associates and non-cash items.

For Q3 2017, Cerner’s sales and client service expenses increased 10% on a y-o-y basis. The Company’s software development increased 13%, driven by non-cash items, as it recorded $7 million less capitalized software and $9 million more amortization than Q3 2016.

Cerner’s GAAP operating margin was 19.4% in Q3 2017, compared to 20.4% in Q3 2016. The Company’s adjusted operating margin was 23.1% in the reported quarter, down 130 basis points from the year ago same period, due to a technology resale mix and non-cash expenses.

On a US GAAP basis, Cerner’s net earnings were $177.4 million and diluted earnings per share (EPS) was $0.52 in Q3 2017, compared to GAAP net earnings of $170.0 million and diluted EPS of $0.49 in Q3 2016.

The Company’s adjusted net earnings were $205.9 million, or $0.61 per diluted share, for the reported quarter versus $202.6 million, or 0.59 per diluted share, in the year earlier comparable quarter. Analysts’ consensus estimates for adjusted diluted EPS were $0.62 for Q3 2017.

Segment Results

For Q3 2017, Cerner’s System segment recorded revenue of $324 million, up 8% compared to Q3 2016, due to a growth in licensed software and subscriptions being partially offset by a decline in technology resale. The Company’s Support and Maintenance segment’s revenue increased 4% to $263 million for the reported quarter.

In Q3 2017, Cerner’s Total Services segment’s revenue, including professional and managed services, was up 9% to $664 million, while the Company generated $24 million in reimbursed travel.

On a geographical basis, Cerner’s Domestic’s revenue increased 7% to $1.13 billion on a y-o-y basis, while non-US revenue was $142 million, increasing 10% compared to the year ago corresponding period.

For Q3 2017, Cerner’s System segment’s sales margin increased to 67.5% from 66.3% in Q2 2017, due to the lower technology resale, but was down from 69% in Q3 2016, due to the mix of technology resale, including lower levels of third-party software margin.

Cash Position

For Q3 2017, Cerner recorded an operating cash flow of $362.94 million compared to $311.06 million in Q3 2016, and a free cash flow of $222.87 million versus $127.17 million in the year earlier same quarter. Cerner’s days’ sales outstanding were 73 days in Q3 2017, down from 76 days in Q3 2016. The Company’s total backlog was $16.53 billion at the end of the reported quarter, up 7% on a y-o-y basis.

Outlook

For Q4 2017, Cerner is forecasting revenue between $1.30 billion and $1.35 billion; adjusted diluted EPS in the band of $0.60 and $0.62; and bookings between $1.75 billion and $2.00 billion.

For FY18, Cerner is projecting revenue between $5.50 billion and $5.70 billion, with the midpoint of this range reflecting a growth of 9% on a y-o-y basis. The Company is estimating adjusted diluted EPS to be between $2.52 and $2.68 per share for FY18.

Stock Performance Snapshot

November 27, 2017 – At Monday’s closing bell, Cerner’s stock declined 1.49%, ending the trading session at $69.52.

Volume traded for the day: 3.07 million shares.

Stock performance in the last three-month – up 7.57%; previous six-month period – up 6.25%; past twelve-month period – up 37.69%; and year-to-date – up 46.76%

After yesterday’s close, Cerner’s market cap was at $22.93 billion.

Price to Earnings (P/E) ratio was at 34.57.

The stock is part of the Technology sector, categorized under the Healthcare Information Services industry.

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