NEW YORK (AP) — Shares of Cerner Corp. jumped Friday after the electronic medical records company posted strong first-quarter results and increased contract bookings, and raised its expectations for the full year.
THE SPARK: Cerner provides electronic medical record systems and revenue management software for doctors and medical centers. It reported its quarterly results after the market closed on Thursday, saying its profit climbed 28 percent to $64.6 million, or 75 cents per share. A year ago Cerner earned $50.3 million, or 59 cents per share. Excluding stock-based compensation costs, the company said its profit rose to 80 cents per share. Its revenue increased 14 percent to $491.7 million from $431.3 million.
Analysts expected a profit of 77 cents per share and $485.8 million in revenue, according to FactSet.
Recommended For You
The Kansas City, Mo., company said its revenue from system sales rose 20 percent to $140.4 million. Support, maintenance and service revenue increased 11 percent to $341 million.
Cerner said it booked $524.9 million in contracts during the first quarter, up 30 percent from the previous year.
THE BIG PICTURE: Cerner said it now expects full-year income of $3.55 to $3.62 per share, up from a previous estimate of $3.50 to $3.60 per share. The forecast excludes 21 to 23 cents per share in stock-based compensation costs. The company raised its revenue guidance to a range of $2.07 billion to $2.12 billion, from $2.05 billion to $2.1 billion.
Analysts expect Cerner to report a profit of $3.58 per share and $2.09 billion in revenue on average.
In the second quarter, Cerner projects a profit of 83 cents to 87 cents per share, excluding 5 to 6 cents per share in stock-based compensation costs. It said revenue will be between $505 million and $520 million. Analysts currently expect a profit of 86 cents per share and revenue of $512.6 million.
Cerner said it expects to book new contracts worth $540 million to $570 million during the second quarter.
THE ANALYSIS: Morgan Keegan analyst Jamie Stockton said Cerner's service revenue was stronger than expected, and the company did a good job of controlling costs, which boosted its profit. Stockton said that first-quarter contract bookings surpassed Wall Street estimates by about $70 million, and its second-quarter guidance is about $40 million above estimates.
He maintained an "Outperform" rating on the stock, and raised his price target to $123 per share from $109.
SHARE ACTION: Cerner shares advanced $10.32, or 9.2 percent, to $122.41 in midday trading. Earlier the stock reached an all-time high of $124.75.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
