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Cerner (CERN) to Report Q4 Earnings: What's in the Offing?

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Cerner Corporation is expected to release fourth-quarter 2021 results in the early weeks of February, before the closing bell. In the last reported quarter, the company delivered an earnings surprise of 4.9%. Its earnings beat estimates in three of the trailing four quarters and came in line once, the average surprise being 3.2%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 88 cents, suggesting an improvement of 12.8% from the year-ago quarter. The same for revenues stands at $1.49 billion, indicating growth of 6.5% from the prior-year reported figure.

Factors to Note

Cerner continues to benefit 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. This is likely to get reflected in the company’s fourth-quarter results.

Adjusted earnings per share (EPS) is projected to grow in the range of 10% to 13% in the fourth quarter. Per management, the company’s cost optimization initiatives to date have been able to offset the impact of lower revenues due to the pandemic and lost earnings from divested businesses. This, in turn, might have contributed to EPS growth.

Cerner Corporation Price and EPS Surprise

Cerner Corporation Price and EPS Surprise

Cerner Corporation price-eps-surprise | Cerner Corporation Quote

Cerner has made substantial progress in its work with the Federal government, which includes expansion of interoperability capabilities that are important for the success of the Veterans Affairs (VA) and the Department of Defence (DoD) programs.

According to the third-quarter 2021 earnings call, the DoD is currently utilizing Cerner solutions in 17 states over 1,000 locations and serving approximately 64,000 end users. The company is on track to meet their full deployment schedule on time and on budget by the end of calendar year 2023.

In December 2021, Cerner announced an agreement with Oracle Corporation via which the latter is set to acquire Cerner for around $28.3 billion. The transaction, which is expected to close in 2022, is subject to the receipt of certain regulatory approvals and satisfying other closing conditions.

In October, the company launched a new operating unit, Cerner Enviza, which offers data-driven solutions and research services to help bring clarity to multi-dimensional data via real-world evidence and insights. In the same month, Cerner unveiled its intention to align research and development resources with solutions that are most needed by caregivers worldwide — via its latest offering — Cerner RevElate. The company’s go-forward patient-accounting product, Cerner RevElate, is a testament to its investment in facilitating patient-accounting capabilities and enterprise-wide technology optimization.

These developments are likely to have contributed to the company’s fourth-quarter performance.

Here’s What the Quantitative Model Suggests

Per our proven model, a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see below.

Earnings ESP: Cerner has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #2.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

AMN Healthcare Services, Inc. (AMN - Free Report) has an Earnings ESP of +10.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. The company’s earnings yield of 5.5% compares favorably with the industry’s 0.8%.

Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank of 2.

Henry Schein’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 5.9% compares favorably with the industry’s 4.1%.

Laboratory Corporation of America Holdings (LH - Free Report) , also popularly known as LabCorp, has an Earnings ESP of +9.94% and a Zacks Rank of 3.

LabCorp’s long-term earnings growth rate is estimated at 10.6%. The company’s earnings yield of 6.8% compares favorably with the industry’s 4.3%.

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