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    Cerner jumps on strong 4Q revenue and bookings

    Associated Press – Wed, Feb 8, 2012

    NEW YORK (AP) — Shares of electronic medical records company Cerner Corp. climbed Wednesday after Cerner reported strong-fourth quarter revenue and booked more new business than Wall Street expected.

    THE SPARK: After the markets closed on Tuesday, Cerner said its quarterly profit grew 29 percent, to $91.2 million, or 52 cents per share, from $70.6 million, or 41 cents per share. Excluding one-time costs it said it earned 55 cents per share. Revenue rose 23 percent, to $615.6 million from $500.2 million.

    Analysts expected the company to report a profit of 53 cents per share and $586.3 million in revenue.

    Cerner said its revenue from system sales jumped 34 percent to $220.5 million, and revenue from support, maintenance, and other services rose 17 percent to $384 million. Its contract bookings climbed 44 percent to $899 million, which the company said was a record.

    THE BIG PICTURE: The Kansas City, Mo., company provides electronic medical record systems and revenue management software for doctors and medical centers, and it said revenue is growing as more practices and hospitals switch to electronic records.

    "We expect to continue to see a strong market for health care IT solutions and services for years to come as the health care industry undergoes a transition from paper to digital records and shifts from volume-based payment programs to programs based on measurements of quality and outcomes," said Chairman, President and CEO Neal Patterson.

    Cerner forecast a profit of $2.20 to $2.30 per share in 2012 and said its revenue will be between $2.43 billion to $2.5 billion. That's similar to analyst projections of $2.25 per share and $2.46 billion in revenue.

    Cerner said it expects an adjusted profit of 48 to 50 cents per share in the first quarter on $565 million to $585 million in revenue. The company expects to book between $560 million and $600 million in new business during the quarter. Analysts expect a profit of 49 cents per share and $566.6 million in revenue, on average.

    THE ANALYSIS: Morgan Keegan analyst Jamie Stockton said Cerner's bookings surpassed his expectations by more than $200 million. He credited the result to sources including strong software and implementation revenue and large deals with international customers. Stockton wrote that Cerner's revenue should continue to grow because of federal funding for use of electronic health records, but after that federal funding ends, it should continue to win greater acceptance of its ITWorks information technology and RevWorks revenue cycle management products.

    "The company is somewhat unique among the EHR plays in our universe, because it has a clear plan (ITWorks, RevWorks, device connectivity and international) to generate robust growth after the government EHR program," he wrote. Stockton rates Cerner shares "Outperform."

    SHARE ACTION: Cerner shares advanced $8.34, or 13.3 percent, to $70.91 in afternoon trading. Earlier in trading the stock peaked at $71.80, its highest price since Sept. 29.

     

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