Earnings from Cerner and Church & Dwight

We had two more earnings reports today. Cerner (CERN) has been stuggling for us this year, but we got some good news today. The healthcare-IT firm said it made 86 cents per share for its Q3. That’s up 19% from last year. Revenue rose 7% to $1.468 billion and free cash flow increased by 32% to $312 million.

“During the third quarter, we delivered solid revenue growth, expanded Adjusted Operating Margin (non-GAAP) by 150 basis points and increased Adjusted Diluted EPS (non-GAAP) by nearly 20%,” said Mark Erceg, Executive Vice President and Chief Financial Officer. “The organizational transformation and productivity measures implemented earlier this year and additional on-going product focus and cost control initiatives are strengthening our business. A clear focus on cash generation is also having a positive impact as evidenced by a 32% increase in Free Cash Flow (non-GAAP) for the quarter. The increase in Free Cash Flow (non-GAAP) and our strong balance sheet allowed us to repurchase $375 million of shares during the quarter, which brings our year-to-date purchases to $1.1 billion.”

Those are solid numbers. For Q4, Cerner expects revenue “to grow upper-mid-single digits.” For earnings, Cerner sees EPS growth of 10% to 13%.

Let’s do some math. Since Cerner made 78 cents per share for last year’s Q4, that implies earnings for this year’s Q4 of 86 to 88 cents per share. For the first three quarters of this year, Cerner has made $2.42 per share. The new guidance implies full year earnings of $3.28 to $3.30 per share. That’s an increase to the previous guidance of at least $3.25 per share.

The shares gapped up nearly 7% at today’s open, but it’s backed off some since then.

Three months ago, Church & Dwight (CHD) said that Q3 was going to be weak. The consumer-products company projected earnings of 70 cents per share which was well below Wall Street’s forecast. The official word was that they were “temporarily constrained by supply.”

Well, I guess they were a little conservative. Today we learned that C&D made 80 cents per share for its Q3.

Matthew Farrell, Chief Executive Officer, commented, “Our brands once again experienced strong consumption in Q3. Organic sales growth of 3.7% is on top of 9.9% organic growth in Q3 2020. In the U.S. we grew consumption in 12 of the 16 categories, with five categories exceeding double digit growth. Consumption continues to outpace shipments as supply chain disruptions continue. Global online sales grew 2.2% (on top of 102% growth in Q3 2020) and as a percentage of total sales has expanded to 14.3% in Q3.

Church & Dwight now expects full-year sales growth of 5.5% and 4% organic sales growth. For earnings, the company expects 61 cents per share. That would come to $3 per share for the entire year. The shares got a small pop after the report.

Posted by on October 29th, 2021 at 2:03 pm


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