) rose nearly 8% following the announcement of a multiyear
partnership with Intermountain Healthcare. It was close to the
52-week high of $55.07.
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Intermountain is a Utah-based non-profit health care provider. It
has 22 hospitals, 185 clinics, a medical group comprising 1,000
physicians and a health plans division. The partnership agreement
will implement Cerner's electronic medical record and revenue
cycle solutions across all of Intermountain's hospitals and
The partnership will also develop a new set of tools for a
post-fee-for-service world in areas such as activity-based
costing. As per the agreement, staffs from Cerner will relocate
to Salt Lake City, Utah and work with Cerner Intermountain's
executives. The partnership is expected to generate more than $50
million in annual revenue to CERN.
Cerner reported a 14.3% rise in second-quarter 2013 earnings per
share to 32 cents, meeting the Zacks Consensus Estimate. Net
income rose 15.4% year over year to $112.9 million.
Revenues in the quarter rose 11.0% year over year to $707.6
million. However, it missed the Zacks Consensus Estimate of $724
million. The sales growth was at the lower end of Cerner's
earlier assumptions due to reduced volume of tech resale, which
carries a lower margin.
For the third quarter of 2013, CERN forecasts sales in a band of
$740 million-$770 million. Earnings per share, before share based
compensation expense, are expected in the range of 35 cents to 36
cents. Cerner projects stock-based compensation costs to dilute
second quarter earnings by about 2 cents to 3 cents.
For 2013, the company continues to forecast sales in the region
of $2,950 million to $3,050 million. Earnings per share, before
share-based compensation expense, are forecasted in the range of
$1.40 and $1.42 (earlier $1.39 and $1.42). Cerner projects
stock-based compensation costs to dilute earnings by about 8
cents to 9 cents.
Currently, Cerner carries a Zacks Rank #3 (Hold). Other medical
information systems stocks that are worth a look include
Streamline Health Solutions, Inc.
) with a Zacks Rank #2 (Buy). These apart, we consider medical
product stocks such as
) with a Zacks Rank #1 (Strong Buy) and
) with a Zacks Rank #2 (Buy).