It has been about a month since the last earnings report for Cerner . Shares have added about 0.3% 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 catalysts.
Cerner Q1 Earnings in Line, Revenues Lag Estimates
Cerner Corporation reported first-quarter 2022 adjusted earnings of 89 cents per share, which came in line with the Zacks Consensus Estimate. The bottom line improved 17% from the prior-year quarter.
GAAP EPS in the quarter was 70 cents, up 25% from the prior-year quarter.
Revenue Details
The company reported revenues of $1.43 billion, which missed the Zacks Consensus Estimate by 2.5%. However, the top line increased 3% from the year-ago quarter.
Segmental Performance
Licensed software revenues were $189.4 million, which rose 17.2% from the year-ago quarter.
Technology resale revenues were $47.5 million, down 3.9% on a year-over-year basis.
Revenues from Subscriptions were $94.4 million, down 5.4%.
Professional services’ revenues totaled $525.3 million, up 6.3% from the prior-year quarter figure.
Revenues at the Managed services unit amounted to $324.6 million, up 2.3%.
Support and maintenance revenues were $242.9 million, down 7.8% year over year.
Reimbursed travel revenues amounted to $5.7 million, reflecting an increase of 3.6%.
Margins
In the quarter under review, gross profit was $1.19 billion, up 2.5% on a year-over-year basis. Gross margin was 82.9%, down 50 basis points (bps).
General and administrative expenses declined 2.7% to $109.3 million. Software development expenses rose 1.4% to $195.1 million.
Operating income totaled $251.9 million, up 15.6% from the prior-year quarter. Operating margin expanded 240 bps to 21.2%.
Financial Position
The company exited the first quarter with cash and cash equivalents of $709.5 million compared with $589.8 million in the previous quarter.
Net cash from operating activities in the first quarter totaled $375.1 million compared with $450.4 million in the year-ago period.
Free cash flow amounted to $276.4million, down from $290.9 million a year ago.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Cerner has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 trending upward for the stock, and the magnitude of this revision has been net zero. 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 0.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Cerner . Shares have added about 0.3% 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 catalysts.
Cerner Q1 Earnings in Line, Revenues Lag Estimates
Cerner Corporation reported first-quarter 2022 adjusted earnings of 89 cents per share, which came in line with the Zacks Consensus Estimate. The bottom line improved 17% from the prior-year quarter.
GAAP EPS in the quarter was 70 cents, up 25% from the prior-year quarter.
Revenue Details
The company reported revenues of $1.43 billion, which missed the Zacks Consensus Estimate by 2.5%. However, the top line increased 3% from the year-ago quarter.
Segmental Performance
Licensed software revenues were $189.4 million, which rose 17.2% from the year-ago quarter.
Technology resale revenues were $47.5 million, down 3.9% on a year-over-year basis.
Revenues from Subscriptions were $94.4 million, down 5.4%.
Professional services’ revenues totaled $525.3 million, up 6.3% from the prior-year quarter figure.
Revenues at the Managed services unit amounted to $324.6 million, up 2.3%.
Support and maintenance revenues were $242.9 million, down 7.8% year over year.
Reimbursed travel revenues amounted to $5.7 million, reflecting an increase of 3.6%.
Margins
In the quarter under review, gross profit was $1.19 billion, up 2.5% on a year-over-year basis. Gross margin was 82.9%, down 50 basis points (bps).
General and administrative expenses declined 2.7% to $109.3 million. Software development expenses rose 1.4% to $195.1 million.
Operating income totaled $251.9 million, up 15.6% from the prior-year quarter. Operating margin expanded 240 bps to 21.2%.
Financial Position
The company exited the first quarter with cash and cash equivalents of $709.5 million compared with $589.8 million in the previous quarter.
Net cash from operating activities in the first quarter totaled $375.1 million compared with $450.4 million in the year-ago period.
Free cash flow amounted to $276.4million, down from $290.9 million a year ago.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Cerner has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 trending upward for the stock, and the magnitude of this revision has been net zero. Notably, Cerner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.