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Cerner (CERN) Q4 Earnings Match Estimates, Revenues Beat
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Cerner Corporation reported fourth-quarter 2020 adjusted earnings of 78 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 4% from the prior-year quarter.
For full-year 2020, the company reported adjusted EPS of $2.84, up 5.9% from 2019. The figure came in line with the consensus mark.
Revenue Details
The company reported revenues of $1.39 billion, which beat the Zacks Consensus Estimate by 0.1%. However, the top line declined 3.2% from the year-ago quarter.
For the full-year 2020, the company delivered revenues of $5.51 billion, down 3.3% from 2019 but outpaced the consensus mark by 0.2%.
Revenues by Geography
Per management, U.S. revenues grossed $1.23 billion, down 3% from the prior-year quarter.
Non-U.S. revenues fell 3% to $161 million from the year-ago quarter primarily due to the divestiture of assets in Germany and Spain.
Bookings
In the reported quarter, the company’s bookings totaled $1.68 billion, up 0.6% from the year-ago quarter. Also, the metric came within the company’s guided range.
Segmental Performance
Licensed software revenues were $174.3 million, which dipped 0.1% from the year-ago quarter.
Technology resale revenues were $55.9 million, down 7.5% on a year-over-year basis.
Revenues from Subscriptions were $98.4 million, up 6.1% year over year.
Cerner Corporation Price, Consensus and EPS Surprise
Professional services’ revenues totaled $478.1 million, down 6.1% from the prior-year quarter number. The downside can be attributed to impact of pandemic divestitures, lower third-party services, and the termination of the large RevWorks agreement in 2019.
Revenues at the Managed services unit amounted to $317.1 million, up 2.5% from the prior-year quarter.
Support and maintenance revenues were $263.1 million, down 3.9% year over year.
Reimbursed travel revenues amounted to $8.2 million, reflecting year-over-year decline of 62.7% as a result of the ongoing pandemic-led travel restrictions.
Margins
In the quarter under review, gross profit was $1.16 billion, down 0.4% year over year. Gross margin was 83.2%, up 240 basis points (bps) on a year-over-year basis.
General and administrative expenses decreased 17.7% to $100.6 million. However, software development expenses rose 5.2% to $197.9 million.
Operating income totaled $177.5 million, down 2.9% from the prior-year quarter. Operating margin remained flat on a year-over-year basis to 12.7%.
2021 Guidance
For first-quarter 2021, Cerner anticipates revenues between $1.37 billion and $1.42 billion. The Zacks Consensus Estimate for revenues stands at $1.41 billion.
For first-quarter 2021 adjusted EPS is projected between 72 cents and 76 cents. The consensus mark for earnings is pegged at 76 cents.
New business bookings for first-quarter 2021 are estimated between $1.15 billion and $1.35 billion.
For full-year 2021, revenues are projected to be $5.75-$5.95 billion. The Zacks Consensus Estimate for revenues stands at $5.69 billion.
Adjusted EPS is expected to be band of $3.10-$3.20. The consensus mark for earnings is pegged at $3.21.
Wrapping Up
Cerner exited the fourth quarter on a mixed note. The company continues to witness strong contributions from key areas like Population Health, Revenue Cycle and IT Works. Further, gains in Subscriptions and Managed Services units buoy optimism. Gross margin expansion is also a positive. Also, bookings witnessed growth in the quarter under review.
The company benefited from electronic health record (EHR), electronic patient record (EPR) or electronic medical record (EMR) platforms that provide patient care in acute inpatient and outpatient settings.
The company also saw a decrease in revenues across Licensed software, Technology resale, Professional services, Support and maintenance and Reimbursed travel segments. Moreover, domestic and international revenues witnessed a fall in the quarter under review. Further, competition in the global MedTech space remains a concern.
Zacks Rank
Currently, Cerner carries a Zacks Rank #3 (Hold).
Earnings of Other MedTech Majors at a Glance
Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Hologic, Inc. (HOLX - Free Report) , Abbott Laboratories (ABT - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) . While Hologic sports a Zacks Rank of 1 (Strong Buy), both Abbott and AngioDynamics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.
AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%.
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
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Cerner (CERN) Q4 Earnings Match Estimates, Revenues Beat
Cerner Corporation reported fourth-quarter 2020 adjusted earnings of 78 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 4% from the prior-year quarter.
For full-year 2020, the company reported adjusted EPS of $2.84, up 5.9% from 2019. The figure came in line with the consensus mark.
Revenue Details
The company reported revenues of $1.39 billion, which beat the Zacks Consensus Estimate by 0.1%. However, the top line declined 3.2% from the year-ago quarter.
For the full-year 2020, the company delivered revenues of $5.51 billion, down 3.3% from 2019 but outpaced the consensus mark by 0.2%.
Revenues by Geography
Per management, U.S. revenues grossed $1.23 billion, down 3% from the prior-year quarter.
Non-U.S. revenues fell 3% to $161 million from the year-ago quarter primarily due to the divestiture of assets in Germany and Spain.
Bookings
In the reported quarter, the company’s bookings totaled $1.68 billion, up 0.6% from the year-ago quarter. Also, the metric came within the company’s guided range.
Segmental Performance
Licensed software revenues were $174.3 million, which dipped 0.1% from the year-ago quarter.
Technology resale revenues were $55.9 million, down 7.5% on a year-over-year basis.
Revenues from Subscriptions were $98.4 million, up 6.1% year over year.
Cerner Corporation Price, Consensus and EPS Surprise
Cerner Corporation price-consensus-eps-surprise-chart | Cerner Corporation Quote
Professional services’ revenues totaled $478.1 million, down 6.1% from the prior-year quarter number. The downside can be attributed to impact of pandemic divestitures, lower third-party services, and the termination of the large RevWorks agreement in 2019.
Revenues at the Managed services unit amounted to $317.1 million, up 2.5% from the prior-year quarter.
Support and maintenance revenues were $263.1 million, down 3.9% year over year.
Reimbursed travel revenues amounted to $8.2 million, reflecting year-over-year decline of 62.7% as a result of the ongoing pandemic-led travel restrictions.
Margins
In the quarter under review, gross profit was $1.16 billion, down 0.4% year over year. Gross margin was 83.2%, up 240 basis points (bps) on a year-over-year basis.
General and administrative expenses decreased 17.7% to $100.6 million. However, software development expenses rose 5.2% to $197.9 million.
Operating income totaled $177.5 million, down 2.9% from the prior-year quarter. Operating margin remained flat on a year-over-year basis to 12.7%.
2021 Guidance
For first-quarter 2021, Cerner anticipates revenues between $1.37 billion and $1.42 billion. The Zacks Consensus Estimate for revenues stands at $1.41 billion.
For first-quarter 2021 adjusted EPS is projected between 72 cents and 76 cents. The consensus mark for earnings is pegged at 76 cents.
New business bookings for first-quarter 2021 are estimated between $1.15 billion and $1.35 billion.
For full-year 2021, revenues are projected to be $5.75-$5.95 billion. The Zacks Consensus Estimate for revenues stands at $5.69 billion.
Adjusted EPS is expected to be band of $3.10-$3.20. The consensus mark for earnings is pegged at $3.21.
Wrapping Up
Cerner exited the fourth quarter on a mixed note. The company continues to witness strong contributions from key areas like Population Health, Revenue Cycle and IT Works. Further, gains in Subscriptions and Managed Services units buoy optimism. Gross margin expansion is also a positive. Also, bookings witnessed growth in the quarter under review.
The company benefited from electronic health record (EHR), electronic patient record (EPR) or electronic medical record (EMR) platforms that provide patient care in acute inpatient and outpatient settings.
The company also saw a decrease in revenues across Licensed software, Technology resale, Professional services, Support and maintenance and Reimbursed travel segments. Moreover, domestic and international revenues witnessed a fall in the quarter under review. Further, competition in the global MedTech space remains a concern.
Zacks Rank
Currently, Cerner carries a Zacks Rank #3 (Hold).
Earnings of Other MedTech Majors at a Glance
Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Hologic, Inc. (HOLX - Free Report) , Abbott Laboratories (ABT - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) . While Hologic sports a Zacks Rank of 1 (Strong Buy), both Abbott and AngioDynamics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.
AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%.
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>