What's In The Cards For Cerner (CERN) This Earnings Season?
Zacks Investment Research | Apr 24, 2017 10:45PM ET
North Kansas City, MO-based Cerner Corporation (NASDAQ:CERN) , a leading global provider of healthcare information technology solutions (HCIT), is set to report first-quarter 2017 results, after the closing bell on Apr 27.
Last quarter, the company reported adjusted earnings of 57 cents, in line with the Zacks Consensus Estimate. However, the company’s earnings did not top the Zacks Consensus Estimate in any of the last four quarters, resulting in an average miss of 0.45%. Delving deeper into the fundamentals of the stock, let’s see how things are shaping up prior to this release.
Factors at Play
We believe that Cerner’s strong product portfolio will help it to boost its customer base. The frequent contract wins reflect growing traction. Furthermore, the company has strong growth opportunities in the revenue cycle management (RCM) and ambulatory space.
The company forecasts revenues between $1.200 billion and $1.275 billion for first-quarter 2017. Booking revenues are projected in the band of $1.125 billion and $1.275 billion. Adjusted earnings are expected at 57 cents to 59 cents per share.
However, the HCIT market is highly competitive and Cerner, a major player in this space, has been facing cut-throat competition from other reputed players. This has impacted the company’s pricing and margins to a great extent. Stringent hospital budgets exert further pressure on pricing. We do not expect the first quarter to have been an exception.
Also, overall activities of Cerner during the first quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter to be reported fell 2 cents to 53 cents per share in the last 90 days.
Cerner Corporation Price and EPS Surprise
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