Cerner Corporation (Nasdaq: CERN) today announced results for the 2018 second quarter that ended June 30, 2018.
Bookings in the second quarter of 2018 were $1.775 billion, an increase of 9 percent compared to $1.636 billion in the second quarter of 2017.
Second quarter revenue was $1.368 billion, an increase of 6 percent compared to $1.292 billion in the second quarter of 2017.
On a U.S. Generally Accepted Accounting Principles (GAAP) basis, second quarter 2018 net earnings were $169.4 million and diluted earnings per share were $0.51. Second quarter 2017 GAAP net earnings were $179.7 million and diluted earnings per share were $0.53.
Adjusted Net Earnings for second quarter 2018 were $207.0 million, compared to $205.5 million of Adjusted Net Earnings in the second quarter of 2017. Adjusted Diluted Earnings Per Share (EPS) were $0.62 in the second quarter of 2018 compared to $0.61 of Adjusted Diluted EPS in the year-ago quarter. Analysts’ consensus estimate for second quarter 2018 Adjusted Diluted EPS was $0.60.
Adjusted Net Earnings and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP. These non-GAAP financial measures should not be substituted for GAAP net earnings or GAAP diluted earnings per share, respectively, as measures of Cerner’s performance, but instead should be utilized as supplemental measures of financial performance in evaluating our business. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results,” where our non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures.
- Second quarter operating cash flow of $299.7 million.
- Second quarter Free Cash Flow of $121.1 million. Free Cash Flow is a non-GAAP financial measure defined as GAAP cash flows from operating activities less capital purchases and capitalized software development costs. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.”
- Second quarter days sales outstanding of 77 days, up from 73 days in the year-ago period.
- Total backlog of $14.79 billion.
“I am pleased with our second quarter results, which included all key metrics being at or above expected levels,” said Zane Burke, President. “Our results were solid across all of our major solution and services categories and included good contributions from U.S. and non-U.S. regions. Looking ahead, we believe our solutions and tech-enabled services are well aligned with the challenges providers and other health care stakeholders are facing, and we have a significant opportunity to grow as we help them with their transition to value-based care in coming years.”
Future Period Guidance
Cerner currently expects:
- Third quarter 2018 revenue between $1.335 billion and $1.385 billion.
- Full year 2018 revenue between $5.325 billion and $5.450 billion, consistent with previously provided full year guidance.
- Third quarter 2018 Adjusted Diluted Earnings Per Share between $0.62 and $0.64.
- Full year 2018 Adjusted Diluted Earnings Per Share between $2.45 and $2.55, consistent with previously provided guidance.
- Third quarter 2018 new business bookings between $1.450 billion and $1.650 billion.
Earnings Conference Call
Cerner will host an earnings conference call to provide additional detail on the Company’s results and outlook at 3:30 p.m. CT on August 2, 2018. On the call, Cerner will discuss its second quarter 2018 results and answer questions from the investment community. The call may also include discussion of Cerner developments, and forward-looking and other material information about business and financial matters. The dial-in number for the conference call is (678)-509-7542; the passcode is Cerner. Cerner recommends joining the call 15 minutes early for registration. The re-broadcast of the call will be available from 6:30 p.m. CT, August 2, 2018 through 10:59 p.m. CT, August 5, 2018. The dial-in number for the re-broadcast is (855) 859-2056; the passcode is 1189716.
An audio webcast will be available live and archived on Cerner’s website at www.cerner.com under the About Us section (click Investor Relations, then Presentations and Webcasts).
Cerner’s health technologies connect people and information systems at more than 27,000 contracted provider facilities worldwide dedicated to creating smarter and better care for individuals and communities. Recognized globally for innovation, Cerner assists clinicians in making care decisions and assists organizations in managing the health of their populations. The company also offers an integrated clinical and financial system to help manage day-to-day revenue functions, as well as a wide range of services to support clinical, financial and operational needs, focused on people. For more information, visit Cerner.com, The Cerner Blog or connect on Facebook, Instagram, LinkedIn Twitter or The Cerner Podcast. Nasdaq: CERN. Smarter Care. Better Outcomes. Healthier You.
Certain trademarks, service marks and logos set forth herein are property of Cerner Corporation and/or its subsidiaries.
All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements. These forward-looking statements are based on the current beliefs, expectations and assumptions of Cerner's management with respect to future events and are subject to a number of significant risks and uncertainties. It is important to note that Cerner's performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words “expect”, “expectations”, “guidance”, “positioned”, “believe”, “will”, “opportunity”, “forecasted”, “estimate”, “outlook” or the negative of these words, variations thereof or similar expressions are intended to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: possibility of significant costs and reputational harm related to product-related liabilities; potential claims for system errors and warranties; the possibility of interruption at our data centers or client support facilities that could expose us to significant costs and reputational harm; the possibility of increased expenses, exposure to legal claims and regulatory actions and reputational harm associated with a cyberattack or other breach in our IT security; our proprietary technology may be subject to claims for infringement or misappropriation of intellectual property rights of others, or may be infringed or misappropriated by others; potential claims or other risks associated with relying on open source software in our proprietary software, solutions or services; material adverse resolution of legal proceedings; risks associated with our global operations, including without limitation greater difficulty in collecting accounts receivable; risks associated with fluctuations in foreign currency exchange rates; changes in tax laws, regulations or guidance that could adversely affect our tax position and/or challenges to our tax positions in the U.S. and non-U.S. countries; the uncertainty surrounding the impact of the United Kingdom’s vote to leave the European Union (commonly referred to as Brexit) on our global business; risks associated with the unexpected loss or recruitment and retention of key personnel or the failure to successfully develop and execute succession planning to assure transitions of key associates and their knowledge, relationships and expertise; risks related to our dependence on strategic relationships and third party suppliers; risks inherent with business acquisitions and combinations and the integration thereof into our business; risks associated with volatility and disruption resulting from global economic or market conditions; significant competition and our ability to quickly respond to market changes and changing technologies and to bring competitive new solutions, devices, features and services to market in a timely fashion; managing growth in the new markets in which we offer solutions, health care devices or services; long sales cycles for our solutions and services; risks inherent in contracting with government clients, including without limitation, complying with strict compliance and disclosure obligations, navigating complex procurement rules and processes and defending against bid protests; risks associated with our outstanding and future indebtedness, such as compliance with restrictive covenants, which may limit our flexibility to operate our business; changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies may adversely affect our financial statements; the potential for losses resulting from asset impairment charges; changing political, economic, regulatory and judicial influences, which could impact the purchasing practices and operations of our clients and increase costs to deliver compliant solutions and services; non-compliance with laws, government regulation or certain industry initiatives; variations in our quarterly operating results; potential variations in our sales forecasts compared to actual sales; volatility in the trading price of our common stock and the timing and volume of market activity; and our directors’ authority to issue preferred stock and the anti-takeover provisions in our corporate governance documents. Additional discussion of these and other risks, uncertainties and factors affecting Cerner's business is contained in Cerner's filings with the Securities and Exchange Commission. The reader should not place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made. Except as required by law, Cerner undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in our business, results of operations or financial condition over time.