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February 15, 2016 11:00 PM

Cerner stocks tumble on lower outlook despite strong earnings

Michael Sandler
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    Cerner Corp., Kansas City, Mo., on Tuesday lowered its revenue expectations for 2016 while reporting strong fourth-quarter and full-year earnings and revenue growth for 2015.

    The health information technology company said it expects first-quarter revenue between $1.15 billion and $1.2 billion and 2016 revenue between $4.9 billion and $5.1 billion. The company previously put its 2016 revenue at over $5 billion.

    Cerner's share prices fell more than 17% in after-hours trading before recovering slightly.

    The company reported a 27% increase in revenue in the last three months of 2015 compared with the year-ago period, and its full-year revenue grew 30% over 2014 to $4.4 billion.

    Cerner President Zane Burke was upbeat about the results. “Our fourth-quarter results reflect a solid finish to a record year,” he said in a news release. The company touted in the release that its bookings for the fourth quarter of 2015 were up 16% over the same period of 2014.

    "While that is a healthy growth rate, it is below our guided range," Burke acknowledged in a call with analysts.

    In December, Iasis Healthcare announced plans to switch its hospitals and health facilities to Cerner's Millennium electronic health-record platform. The project will cost $50 million and will be completed by March 2018.

    Cerner also will soon benefit from significant business with the federal government. The U.S. Army awarded it a contract for pathology department laboratory software and the Defense Department's Military Health System awarded a partnership among Cerner, Leidos and Accenture a 10-year contract to install an EHR system across its 56 hospitals and more than 300 clinics.

    Cerner announced last month that CEO Neal Patterson is being treated for cancer.

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          • - Luminaries
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          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
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