Another good quarter for Cerner

07/25/2013 8:15 PM

07/25/2013 8:15 PM

Fast-growing Cerner Corp. said Thursday that its second-quarter 2013 profits were $112.9 million and diluted earnings were 32 cents a share.

That compared with second quarter 2012 net earnings of $97.8 million and diluted earnings per share of 28 cents.

Second-quarter revenues were $707.6 million, up 11 percent from the year-ago period.

The company said revenue growth was at the low end of its expectations because of “low-margin technology resale.” This had no material impact on earnings, Cerner said.

Other financials “were at the high end of expectations” because of “strength in other areas,” according to a company statement.

Bookings, Cerner’s term for business orders, were $935 million, a record for a second quarter and up 33 percent compared with the second quarter of 2012.

"Our record bookings, strong overall results and positive outlook reflect an ongoing favorable market environment for Cerner," Neal Patterson, Cerner’s chairman and chief executive, said in a prepared statement.

Shares in Cerner closed Thursday at $49.63, up 24 cents a share.

The company said operating cash flow was $176.5 million and free cash flow was $47.4 million for the quarter.

In a conference call after the earnings release, chief financial officer Marc Naughton said free cash flow was smaller than typical for Cerner because of heavy investment in the company’s new Wyandotte County expansion, in research and development, in stock buybacks and in the company’s “population health” programs.

He said the heavy focus on investing back in the company is expected through 2014.

Looking ahead, the company expects third-quarter revenues between $740 million and $770 million and full year 2013 revenue between $2.95 billion and $3.05 billion.

The health care information technology company has products licensed by about 10,000 hospitals, doctors’ offices, medical laboratories, ambulatory centers, pharmacies and other facilities in the United States and abroad.

Separately, the CommonWell Health Alliance, which Cerner took a lead role in establishing, announced earlier this week that Computer Programs and Systems Inc. and Sunquest Information Systems were the newest members of the organization.

The alliance of health information technology suppliers is working on interoperability and privacy protections.

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