Cerner reports a financially healthy 2013
02/05/2014 12:25 AM
02/05/2014 12:25 AM
Cerner Corp. said Tuesday that its fourth-quarter 2013 bookings for new business were a record $1.11 billion and full-year 2013 bookings hit a record $3.77 billion.
The new-order tally for all of 2013 was up 20 percent compared with 2012 bookings of $3.14 billion.
The company said fourth-quarter revenue was $795.3 million, up 12 percent from $710.4 million in the same quarter of 2012. Full-year 2013 revenue was $2.91 billion, up 9 percent compared with 2012.
Cerner’s fourth-quarter 2013 net earnings were reported at $60.1 million, with diluted earnings per share at 17 cents. That compared with $111.8 million in net earnings and diluted earnings per share of 32 cents in the fourth quarter of 2012.
For the full year, 2013 net earnings were $398.4 million and diluted earnings per share were $1.13, compared with $397.2 million and diluted earnings per share of $1.13 in 2012.
The company authorized a 2-for-1 stock split effective June 28, 2013.
Cerner executives said at the outset of last year that they expected 2013 to be a competitive year among health care software providers, but they also expected strong results for the company. That happened.
Cerner president Zane Burke said in a conference call with analysts that 2013 was a “great year” with strong growth and many records and that Cerner was well positioned to continue growth in 2014.
Burke noted several times that Cerner gained market share last year, particularly against its main competitor. That competitor, unnamed in the conference call, is Epic Systems Corp.
Cerner has allied with several smaller competitors to encourage interoperable technology that differs from Epic’s.
Changes in health care laws and advances in technology are pushing rapid growth in the industry as hospitals, clinics and doctor’s offices scramble to digitize patient records and reach “interoperability” — the ability to share information electronically.
“Cerner’s fourth-quarter results reflect a strong finish to the year,” Neal Patterson, Cerner’s chairman, CEO and co-founder, said in releasing the financial results. “In addition to delivering strong operating results in 2013, we invested heavily in our cloud solutions and infrastructure, and I believe these investments are positioning Cerner for growth through the decade.”
Cerner systems operate in 16 foreign countries. The company has about 12,000 employees worldwide, with about 8,500 working on three Kansas City area office campuses. It recently revealed expansion plans for a fourth area site, where the former Bannister Mall in south Kansas City was situated.
Chief financial officer Marc Naughton noted in the analysts call that operating expenses were up 15 percent last year, partly because of large payroll growth. The company added more than 2,300 employees last year.
The company’s clients include more than 2,700 hospitals; 45,000 physicians; 550 facilities, such as laboratories and clinics; 800 home health facilities; 1,750 retail pharmacies and 45 employers.
Building on its three decades of population health information, Cerner says its mission has grown to “contribute to the systemic improvement of health care delivery and the health of communities.”
Burke said Cerner forecasts first-quarter 2014 revenue growth of 16 percent and full-year revenue growth of 13 percent, with earnings per share coming in at $1.62 to $1.67.
Patterson closed the conference call with a longer-range outlook, a decade out, over which time he said the company wants to “continue to be bold.”
He said Cerner “wants to skate where the puck is going,” which means continuing its research and investments into the population health part of the business.
“When the U.S. figures out an alternative to fee-for-service” — the current method of medical cost reimbursement — “we expect to facilitate that move and be there when it happens,” Patterson said. “We think information technology is the biggest lever to implement change in health care.”