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Cerner (CERN) Q1 Earnings Beat Estimates, Revenues Miss
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Cerner Corporation reported first-quarter 2021 adjusted earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 74 cents by 2.7%. The bottom line improved 7% from the prior-year quarter.
Revenue Details
The company reported revenues of $1.39 billion, which missed the Zacks Consensus Estimate by 0.9%. Also, the top line declined 1.7% from the year-ago quarter.
Revenues by Geography
U.S. revenues grossed $1.22 billion, down 1.9% from the prior-year quarter.
Non-U.S. revenues up 0.3% to $165.8 million from the year-ago quarter.
Bookings
In the reported quarter, the company’s bookings totaled $1.23 billion, up 13% from the year-ago quarter.
Segmental Performance
Licensed software revenues were $161.7 million, which increased 2.3% from the year-ago quarter.
Technology resale revenues were $45.7 million, down 11.3% on a year-over-year basis.
Cerner Corporation Price, Consensus and EPS Surprise
Revenues from Subscriptions were $99.8 million, up 5.7% year over year.
Professional services’ revenues totaled $494.4 million, down 3.3% from the prior-year quarter number.
Revenues at the Managed services unit amounted to $317.4 million, up 2.6% from the prior-year quarter.
Support and maintenance revenues were $263.3 million, down 3.8% year over year.
Reimbursed travel revenues amounted to $5.5 million, reflecting year-over-year decline of 59%.
Margins
In the quarter under review, gross profit was $1.16 billion, remaining flat on a year-over-year basis. Gross margin was 83.4%, up 150 basis points (bps) on a year-over-year basis.
General and administrative expenses decreased 19.7% to $112.4 million. However, software development expenses rose 3.8% to $192.3 million.
Operating income totaled $218.1 million, up 22.2% from the prior-year quarter. Operating margin expanded 310 bps on a year-over-year basis to 15.7%.
2021 Guidance
For second-quarter 2021, Cerner anticipates revenues to grow in the high-single digits over second-quarter 2020. The Zacks Consensus Estimate for revenues stands at $1.44 billion.
For second-quarter 2021, adjusted EPS is projected to grow around 20% over the prior-year quarter. The consensus mark for earnings is pegged at 75 cents.
For full-year 2021, revenues are projected to grow in the mid-single digits (replacing the previously guided range of $5.75 billion to $5.95 billion) but represents similar growth. The Zacks Consensus Estimate for revenues stands at $5.83 billion.
Adjusted EPS is expected to be more than $3.20 (up from the previously guided range of $3.10-$3.20). The consensus mark for earnings is pegged at $3.15.
Wrapping Up
Cerner exited the first 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 Licensed software, Subscriptions and Managed Services units buoy optimism. Expansion in both gross and operating margins is also a positive. Further, bookings witnessed growth in the quarter under review. Uptick in international revenues is encouraging.
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 Technology resale, Professional services, Support and maintenance and Reimbursed travel segments. Moreover, domestic revenues witnessed a fall in the quarter under review. Further, competition in the global MedTech space remains a concern.
Illumina reported first-quarter 2021 adjusted EPS of $1.89, which surpassed the Zacks Consensus Estimate by 38.9%. First-quarter revenues of $1.09 billion outpaced the Zacks Consensus Estimate of $1.08 billion.
Boston Scientific reported first-quarter 2020 adjusted EPS of 37 cents, which beat the Zacks Consensus Estimate by 32.1%. First-quarter revenues of $2.75 billion outpaced the consensus mark by 5.3%.
HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion exceeded the Zacks Consensus Estimate by 2.2%.
Zacks Top 10 Stocks for 2021
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Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Cerner (CERN) Q1 Earnings Beat Estimates, Revenues Miss
Cerner Corporation reported first-quarter 2021 adjusted earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 74 cents by 2.7%. The bottom line improved 7% from the prior-year quarter.
Revenue Details
The company reported revenues of $1.39 billion, which missed the Zacks Consensus Estimate by 0.9%. Also, the top line declined 1.7% from the year-ago quarter.
Revenues by Geography
U.S. revenues grossed $1.22 billion, down 1.9% from the prior-year quarter.
Non-U.S. revenues up 0.3% to $165.8 million from the year-ago quarter.
Bookings
In the reported quarter, the company’s bookings totaled $1.23 billion, up 13% from the year-ago quarter.
Segmental Performance
Licensed software revenues were $161.7 million, which increased 2.3% from the year-ago quarter.
Technology resale revenues were $45.7 million, down 11.3% on a year-over-year basis.
Cerner Corporation Price, Consensus and EPS Surprise
Cerner Corporation price-consensus-eps-surprise-chart | Cerner Corporation Quote
Revenues from Subscriptions were $99.8 million, up 5.7% year over year.
Professional services’ revenues totaled $494.4 million, down 3.3% from the prior-year quarter number.
Revenues at the Managed services unit amounted to $317.4 million, up 2.6% from the prior-year quarter.
Support and maintenance revenues were $263.3 million, down 3.8% year over year.
Reimbursed travel revenues amounted to $5.5 million, reflecting year-over-year decline of 59%.
Margins
In the quarter under review, gross profit was $1.16 billion, remaining flat on a year-over-year basis. Gross margin was 83.4%, up 150 basis points (bps) on a year-over-year basis.
General and administrative expenses decreased 19.7% to $112.4 million. However, software development expenses rose 3.8% to $192.3 million.
Operating income totaled $218.1 million, up 22.2% from the prior-year quarter. Operating margin expanded 310 bps on a year-over-year basis to 15.7%.
2021 Guidance
For second-quarter 2021, Cerner anticipates revenues to grow in the high-single digits over second-quarter 2020. The Zacks Consensus Estimate for revenues stands at $1.44 billion.
For second-quarter 2021, adjusted EPS is projected to grow around 20% over the prior-year quarter. The consensus mark for earnings is pegged at 75 cents.
For full-year 2021, revenues are projected to grow in the mid-single digits (replacing the previously guided range of $5.75 billion to $5.95 billion) but represents similar growth. The Zacks Consensus Estimate for revenues stands at $5.83 billion.
Adjusted EPS is expected to be more than $3.20 (up from the previously guided range of $3.10-$3.20). The consensus mark for earnings is pegged at $3.15.
Wrapping Up
Cerner exited the first 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 Licensed software, Subscriptions and Managed Services units buoy optimism. Expansion in both gross and operating margins is also a positive. Further, bookings witnessed growth in the quarter under review. Uptick in international revenues is encouraging.
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 Technology resale, Professional services, Support and maintenance and Reimbursed travel segments. Moreover, domestic 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 Illumina, Inc. (ILMN - Free Report) , Boston Scientific Corporation (BSX - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Illumina reported first-quarter 2021 adjusted EPS of $1.89, which surpassed the Zacks Consensus Estimate by 38.9%. First-quarter revenues of $1.09 billion outpaced the Zacks Consensus Estimate of $1.08 billion.
Boston Scientific reported first-quarter 2020 adjusted EPS of 37 cents, which beat the Zacks Consensus Estimate by 32.1%. First-quarter revenues of $2.75 billion outpaced the consensus mark by 5.3%.
HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion exceeded the Zacks Consensus Estimate by 2.2%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>