Cerner Q3 Profit Meets Estimates, Revenues Miss; Shares Down

(RTTNews) - Shares of Cerner Corp. (CERN) declined around 3 percent in the extended trading on Thursday after the supplier of healthcare information technology solutions' third-quarter revenues missed Wall Street analysts' estimate, despite a growth. Quarterly earnings per share increased from last year, and matched estimates. Further, the company said it expects fourth-quarter earnings per share in line or below view.

For the third quarter, net income was $115.34 million or $0.33 per share, compared to $98.89 million or $0.28 per share, last year. Adjusted income for the quarter, which excluded certain items, was $123.58 million or $0.35 per share.

On average, 23 analysts polled by Thomson Reuters expected the company to report profit per share of $0.35 for the quarter. Analysts' estimates typically exclude special items.

Revenue increased 8 percent to $727.83 million, from $676.48 million, last year. Analysts expected revenue of $757.20 million for the quarter.

The company noted that the revenue growth was below its expectations due to reduced levels of low-margin technology resale. However, the lower technology sales had limited impact on earnings, which were in line with expectations due to strength in other areas.

Bookings in the third quarter were $928.0 million, an increase of 21 percent from last year's bookings of $769.9 million.

Total backlog was $8.40 billion, 24 percent higher than last year. This was comprised of $7.63 billion of contract backlog and $769.8 million of support and maintenance backlog.

Looking ahead for the fourth quarter, the company expects that revenue will be between $775 million and $815 million and adjusted earnings per share before share-based compensation expense will be between $0.38 and $0.39. Analysts expect the company to report profit per share of $0.39 on revenue of $815.81 million for the quarter.

Neal Patterson, Cerner chairman, CEO and co-founder said, "In addition to our solid financial results, our third quarter included several very strategic client wins across the globe and major development and deployment milestones for our population health and mobility solutions... Cerner has done well and we believe will continue to do well in the current electronic medical record era, but it's our investments in capabilities beyond the EMR that differentiate us from our current competitors and position us for sustained growth through the decade."

Cerner shares closed Thursday's trading at $57.76, down $0.24 or 0.41 percent. In the extended trading, shares declined $1.86 or 3.22 percent further to close at $55.90.