A month has gone by since the last earnings report for Cerner . Shares have added about 0.5% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Cerner Q4 Earnings Surpass Estimates, Revenues Miss
Cerner Corporation reported fourth-quarter 2021 adjusted earnings of 93 cents per share, which beat the Zacks Consensus Estimate of 88 cents by 5.7%. The bottom line improved 19% from the prior-year quarter.
GAAP earnings per share in the quarter was 59 cents, up 28% from the prior-year quarter.
In full-year 2021, the company reported earnings per share of $3.35, up 18% from the previous year.
Revenue Details
The company reported revenues of $1.45 billion, which missed the Zacks Consensus Estimate by 2.3%. Nonetheless, the top line increased 4% from the year-ago quarter.
In 2021, the company reported $5.77 billion, up 5% from the previous year.
Segmental Performance
Licensed software revenues were $189.7 million, which rose 8.8% from the year-ago quarter.
Technology resale revenues were $44.6 million, down 20.3% on a year-over-year basis.
Revenues from Subscriptions were $92.8 million, down 5.6%.
Professional services’ revenues totaled $533.2 million, up 11.5% from the prior-year quarter figure.
Revenues at the Managed services unit amounted to $327.2 million, up 3.2%.
Support and maintenance revenues were $252.9 million, down 3.9% year over year.
Reimbursed travel revenues amounted to $11.9 million, reflecting an increase of 45.8%.
Margins
In the quarter under review, gross profit was $1.19 billion, up 2.9% on a year-over-year basis. Gross margin was 82.2%, down 100 basis points (bps).
General and administrative expenses increased 29.8% to $130.6 million. Software development expenses rose 0.8% to $199.4 million.
Operating income totaled $215.7 million, up 21.6% from the prior-year quarter. Operating margin expanded 210 bps to 14.8%.
Financial Position
The company exited the fourth quarter with cash and cash equivalents of $589.8 million compared with $459.5 million in the previous quarter.
Cumulative net cash from operating activities in the fourth quarter totaled $1.77 billion compared with $1.44 billion in the year-ago period.
Cumulative free cash flow amounted to $1.17 billion, up from $857.4 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Cerner has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Cerner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Cerner (CERN) Up 0.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Cerner . Shares have added about 0.5% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Cerner Q4 Earnings Surpass Estimates, Revenues Miss
Cerner Corporation reported fourth-quarter 2021 adjusted earnings of 93 cents per share, which beat the Zacks Consensus Estimate of 88 cents by 5.7%. The bottom line improved 19% from the prior-year quarter.
GAAP earnings per share in the quarter was 59 cents, up 28% from the prior-year quarter.
In full-year 2021, the company reported earnings per share of $3.35, up 18% from the previous year.
Revenue Details
The company reported revenues of $1.45 billion, which missed the Zacks Consensus Estimate by 2.3%. Nonetheless, the top line increased 4% from the year-ago quarter.
In 2021, the company reported $5.77 billion, up 5% from the previous year.
Segmental Performance
Licensed software revenues were $189.7 million, which rose 8.8% from the year-ago quarter.
Technology resale revenues were $44.6 million, down 20.3% on a year-over-year basis.
Revenues from Subscriptions were $92.8 million, down 5.6%.
Professional services’ revenues totaled $533.2 million, up 11.5% from the prior-year quarter figure.
Revenues at the Managed services unit amounted to $327.2 million, up 3.2%.
Support and maintenance revenues were $252.9 million, down 3.9% year over year.
Reimbursed travel revenues amounted to $11.9 million, reflecting an increase of 45.8%.
Margins
In the quarter under review, gross profit was $1.19 billion, up 2.9% on a year-over-year basis. Gross margin was 82.2%, down 100 basis points (bps).
General and administrative expenses increased 29.8% to $130.6 million. Software development expenses rose 0.8% to $199.4 million.
Operating income totaled $215.7 million, up 21.6% from the prior-year quarter. Operating margin expanded 210 bps to 14.8%.
Financial Position
The company exited the fourth quarter with cash and cash equivalents of $589.8 million compared with $459.5 million in the previous quarter.
Cumulative net cash from operating activities in the fourth quarter totaled $1.77 billion compared with $1.44 billion in the year-ago period.
Cumulative free cash flow amounted to $1.17 billion, up from $857.4 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Cerner has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Cerner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.