Cerner Earns 58 Cents per Share

Cerner (CERN) today announced results for the 2018 first quarter that ended March 31, 2018.

Bookings in the first quarter of 2018 were $1.398 billion, an increase of 12 percent compared to $1.250 billion in the first quarter of 2017.

First quarter revenue was $1.293 billion, an increase of 3 percent compared to $1.260 billion in the first quarter of 2017.

On a U.S. Generally Accepted Accounting Principles (GAAP) basis, first quarter 2018 net earnings were $160.0 million and diluted earnings per share were $0.48. First quarter 2017 GAAP net earnings were $173.2 million and diluted earnings per share were $0.52.

Adjusted Net Earnings for first quarter 2018 were $193.9 million, compared to $197.8 million of Adjusted Net Earnings in the first quarter of 2017. Adjusted Diluted Earnings Per Share (EPS) were $0.58 in the first quarter of 2018 compared to $0.59 of Adjusted Diluted EPS in the year-ago quarter. Analysts’ consensus estimate for first quarter 2018 Adjusted Diluted EPS was $0.58.

Adjusted Net Earnings and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP. These non-GAAP financial measures should not be substituted for GAAP net earnings or GAAP diluted earnings per share, respectively, as measures of Cerner’s performance, but instead should be utilized as supplemental measures of financial performance in evaluating our business. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results,” where our non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures.

Other Highlights:

First quarter operating cash flow of $409.0 million.

First quarter Free Cash Flow of $255.7 million. Free Cash Flow is a non-GAAP financial measure defined as GAAP cash flows from operating activities less capital purchases and capitalized software development costs. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.”

First quarter days sales outstanding of 73 days, up from 71 days in the year-ago period.

Total backlog of $14.63 billion. Backlog reflects the adoption of the new revenue recognition guidance effective for this quarter, which will be further discussed in Cerner’s Form 10-Q. Certain provisions within such guidance impact how we calculate backlog. Backlog amounts disclosed in prior periods have not been adjusted to reflect the adoption of the new revenue recognition guidance, and are not comparable to, the current period presentation.

“Our results in the first quarter included strong bookings and cash flow and in-line earnings, but our revenue was below expected levels,” said Zane Burke, President. “Our mixed results and revised outlook reflect the delay of a large contract and a less predictable end market. However, we remain optimistic about our long-term growth opportunities due to our strong market position and portfolio of solutions and tech-enabled services that align with the pressures health care stakeholders are facing.”

Future Period Guidance

Cerner currently expects:

Second quarter 2018 revenue between $1.310 billion and $1.360 billion.

Full year 2018 revenue between $5.325 billion and $5.450 billion, down from a range of $5.450 billion to $5.650 billion.

Second quarter 2018 Adjusted Diluted Earnings Per Share between $0.59 and $0.61.

Full year 2018 Adjusted Diluted Earnings Per Share between $2.45 and $2.55, down from a range of $2.57 to $2.73.

Second quarter 2018 new business bookings between $1.350 billion and $1.550 billion.

Posted by on May 2nd, 2018 at 4:08 pm


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