Will Cerner Corp. (CERN) Miss Earnings Estimates? - Analyst Blog


Cerner Corporation ( CERN ) 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 announcement.

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 market.

However, Cerner faces fierce competition from reputed names including Allscripts Healthcare Solutions ( MDRX ), athenahealth ( ATHN ), and Quality Systems ( QSII ). The intensity of competition may pressure both pricing and margin.

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.

Earnings Whispers?

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 below.

Zacks ESP:  Earnings ESP , 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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CERNER CORP (CERN): Free Stock Analysis Report

ATHENAHEALTH IN (ATHN): Free Stock Analysis Report

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QUALITY SYS (QSII): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CERN , ATHN , MDRX , QSII



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