Business

KC-based Cerner Corp. reports 2015 revenue of $4.43 billion

Cerner headquarters are in North Kansas City.
Cerner headquarters are in North Kansas City. rsugg@kcstar.com

Cerner Corp. on Tuesday reported 2015 revenue of $4.43 billion and net earnings of $539.4 million. And in the company’s important measure of future growth, the amount of new business booked reached a record $5.43 billion.

To compare, full-year 2014 revenue was $3.4 billion, net earnings were $525.4 million and new business bookings totaled $4.25 billion.

For the fourth-quarter, the Kansas City-based health care information technology company generated revenue of $1.175 billion, net earnings of $166.1 million and new business bookings of $1.35 billion. That compares to fourth-quarter 2014 revenue of $926 million, net earnings of $147.9 million and new business bookings of $1.16 billion.

In November, when Cerner posted third-quarter financials, it issued a strong forecast for fourth-quarter 2015 revenue of between $1.15 billion and $1.2 billion. However, new orders for the quarter landed short of company expectations of $1.45 billion and $1.55 billion.

Cerner chairman and chief executive Neal Patterson revealed last month that he was diagnosed with a soft tissue cancer and said it was treatable. He said he began treatments immediately and planned to slow down his involvement with the business while under treatment.

Cerner president Zane Burke told stock analysts in a conference call Tuesday after the markets had closed that Patterson’s initial treatments have gone well and that he is pleased “with the excellent care he’s received.”

Cerner is building its fourth office campus in the metro area, a multibillion development on the former Bannister Mall site in south Kansas City. The company employs more than 10,000 in the Kansas City area. By the time the south campus is completed, it alone is expected to house 16,000 Cerner employees by 2020.

Looking forward to 2016, the company said it expects full-year revenue of $4.9 billion to $5.1 billion. As for new bookings, the company forecasts fairly flat new bookings, largely because it will be working on strong backlog from 2015.

The company said 2015 was particularly strong because of a 37 percent growth in business contracts worth more than $5 million and a 62 percent growth in contracts worth more than $10 million. It was the best year in Cerner’s history for new bookings, with both large hospitals and smaller ambulatory facilities contributing.

Part of Cerner’s continuing workload is its collaboration with Leidos on a $16.3 billion contract with the U.S. Department of Defense to digitize and improve the military’s health records system. Last year also completed Cerner’s acquisition of Siemens Health Services.

The company also said it spent $2 billion on research and development.

Overall, Burke said the company believes it is in a strong position as the national health system moves from a fee-for-service payment model to an outcomes-based pay system.

Diane Stafford: 816-234-4359, @kcstarstafford

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