) is set to release its 2014-second quarter results today, after
the closing bell. In the last quarter, the company posted a neutral
surprise. Let's see how things are shaping up for this
Growth Factors This Past Quarter
Cerner is the largest pure-play HCIT company and its wide
footprint, large reference-able client base and composite array of
solutions make it an ideal candidate for investors seeking an
exposure to the HCIT industry. The company continues to be a winner
in the market for hospital clinical information technology with a
significant presence in the rapidly growing ambulatory clinical IT
However, Cerner faces fierce competition from reputed names
Allscripts Healthcare Solutions
). The intensity of competition may pressure both pricing and
For the second quarter of 2014, Cerner anticipates revenues between
$790 and $830 million while adjusted earnings are expected between
36 and 37 cents per share, including share based compensation
expense. These compared with the Zacks Consensus Estimates of $810
million and 36 cents for revenues and earnings per share,
respectively for the quarter.
Our proven model does not conclusively show that Cerner is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3
for this to happen. That is not the case here as you will see
, the difference between the Most Accurate Estimate of 36 cents and
the Zacks Consensus Estimate of the same, stands at nil.
Zacks Rank #3 (Hold):
The combination of Cerner's Zacks Rank #3 (Hold) and nil ESP makes
surprise prediction difficult. We caution against stocks with Zacks
#4 and #5 Ranks (Sell-rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
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