A month has gone by since the last earnings report for Cerner . Shares have added about 9.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cerner due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cerner Earnings Meet Estimates in Q1, EPS View Raised
Cerner reported first-quarter 2019 adjusted earnings of 61 cents per share, in line with the Zacks Consensus Estimate. The bottom line increased from the prior-year quarter’s figure by 5.2%.
The company posted revenues of $1.39 billion, which improved 7.5% year over year and met the Zacks Consensus Estimate.
Revenues by Geography
Per management, U.S. revenues grossed $1.24 billion, in line with the company’s expectations.
Non-U.S. revenues increased $1 million from the year-ago quarter figure to $159 million. Per management, Cerner’s international revenue growth was impacted by foreign exchange rates.
Bookings
In the reported quarter, the company’s bookings totaled $1.24 billion, down from $1.40 billion in the same quarter of the last year.
Segmental Performance
Licensed software revenues shot up 14.6% to $154.5 million, with growth in traditional software and SaaS offerings.
Technology resale revenues were $55.5 million, down 12.4% on a year-over-year basis.
Revenues from Subscriptions grossed $84.3 million, up 10% year over year.
Professional services’ revenues totaled $490.4 million, up 11.1% from the prior-year quarter number, driven by solid growth in implementation services and Cerner’s works businesses.
Revenues at the Managed services unit summed $304.4 million, up 13.5% from the prior-year quarter.
Support and maintenance revenues were $277 million, down 2.7% year over year.
Reimbursed travel revenues amounted to $23.8 million, mirroring a 0.5% decline year over year.
Margins
In the quarter under review, gross profit summed $1.14 billion, up 7.1% year over year. Gross margin was 81.8%, down 30 basis points (bps) on a year-over-year basis.
General and administrative expenses rose 4.2% to $96.2 million. Further, software development expenses increased 11.6% to $180.4 million.
Adjusted operating margin contracted 130 basis points (bps) to 17.5% during the reported quarter.
Guidance
For the second quarter of 2019, Cerner expects revenues between $1.41 billion and $1.46 billion.
Adjusted earnings per share are expected to be 63-65 cents.
Cerner kept its 2019 revenue guidance intact. The company continues to expect revenues between $5.65 billion and $5.85 billion.
Cerner raised 2019 earnings per share view. Notably, the company now expects the metric to be $2.64-$2.72 per share, above the previously mentioned $2.57-$2.67.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
At this time, Cerner has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cerner has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Cerner (CERN) Up 9.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Cerner . Shares have added about 9.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cerner due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
VGM Scores
At this time, Cerner has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Cerner has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.