Reiterate Cerner at Neutral - Analyst Blog
On Apr 29, we retained
) at Neutral after the company reported results for the first
Why the Retention?
On April 25, Cerner Corporation reported first-quarter 2013 adjusted earnings per share of 62 cents beating the Zacks Consensus Estimate of 59 cents and the year-ago earnings per share of 51 cents.
Revenues for the first quarter rose 6.1% year over year to $680 million, missing the Zacks Consensus Estimate of $709 million. The growth in sales was lower than Cerner's earlier assumptions due to reduced volumes of tech resale, which carries a lower margin.
Bookings amounted to $801.6 million, up 23% year over year and a record for the company in any first quarter. Total revenue backlog was $7.58 billion at the end of the first quarter, up 21% year over year, including $6.8 billion of contract backlog and $747.9 million of support and maintenance backlog.
Following the first quarter results, the Zacks Consensus Estimate for 2013 has moved up by a penny to $2.63 over the past week. The Zacks Consensus Estimate for 2014 has remained stagnant at $3.08 during the same timeframe.
For the second quarter of 2013, the company forecasts sales in a band of $705 million and $735 million and earnings per share, before share-based compensation expense, of 66 cents to 68 cents. Fresh bookings for the quarter are projected between $825 million and $875 million. Cerner projects stock-based compensation costs to dilute second quarter earnings by about 4 cents to 5 cents.
For 2013, the company continues to forecast sales in the region of $2,950 million and $3,050 million. Operating margin is expected to expand 100 basis points (bps) during 2013.
Earnings per share, before stock-based compensation expense,
are forecast in the range of $2.78 and $2.83 (earlier $2.75 and
$2.82). Cerner projects stock-based compensation costs to dilute
earnings by about 17 cents to 18 cents (earlier 16 cents to 17
Cerner faces competition from Athenahealth, Inc. ( ATHN ) and Allscripts Healthcare Solutions, Inc. ( MDRX ) in a crowded field.
Cerner carries a Zacks Rank #3 (Buy). Merge Healthcare Inc. ( MRGE ) carries a Zacks Rank #2 (Buy) and is expected to do well.
ATHENAHEALTH IN (ATHN): Free Stock Analysis Report
CERNER CORP (CERN): Free Stock Analysis Report
ALLSCRIPTS HLTH (MDRX): Free Stock Analysis Report
MERGE HEALTHCAR (MRGE): Free Stock Analysis Report
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