Cerner reports a strong first quarter

Cerner Corp. reported Thursday that revenue and bookings were both up substantially in the first quarter from results a year ago.

The North Kansas City-based provider of health care information technology said it booked an all-time first-quarter high of $910.2 million in new business in the quarter ending March 29. Bookings were up 14 percent compared to the year-ago quarter of $801.6 million.

Executives said in a conference call with industry analysts that one-fourth of the bookings were from clients new to Cerner.

“Our pipeline is firming up well, and we see a lot of opportunities,” said chief financial officer Marc Naughton.

First-quarter revenue of $784.8 million was up 15 percent from the first quarter of 2013.

Net earnings were $119.5 million for the quarter, and diluted earnings per share were 34 cents. That compared with 2013 results of $110 million in net earnings and diluted earnings of 31 cents a share.

Executives said higher compensation expense in the quarter affected earnings per share. The numbers also reflected the company’s 2-for-1 stock split effective June 28, 2013.

Cerner said its operating cash flow for the quarter was $155.8 million.

“Our solid first-quarter results represent a good start to the year,” Neal Patterson, Cerner’s chairman, CEO and co-founder, said in a statement.

Patterson said the company is focused on “defining the next generation of the electronic medical record, which will go beyond orders and documentation and become an interactive medium.”

That focus presents strong revenue opportunities, Cerner chief operating officer Mike Nill said on the conference call. Cerner president Lane Burke also characterized the company as well positioned to gain market share.

The health care IT industry is approaching a duopoly led by Cerner and Epic. Several other health care IT companies have allied with Cerner on the idea of sharing data, while Epic is maintaining a more proprietary business model.

Cerner chief of staff Jeff Townsend said the growth differentiator for Cerner will be its focus on “interoperability” of electronic health records and “real-time analytics” to help physicians make on-the-spot care decisions based on aggregate data.

Cerner expects second-quarter 2014 revenue of $790 million to $830 million and full-year revenue between $3.25 billion and $3.4 billion. Analysts have projected Cerner’s 2014 annual revenue at $3.33 billion.

Cerner also expects second-quarter 2014 new business bookings between $1 billion and $1.06 billion.

This story was originally published April 24, 2014 at 3:21 PM with the headline "Cerner reports a strong first quarter."