Thanks to increased operating expenses, Cerner saw a drop in net earnings in the fourth quarter of the year, the company reported in an earnings call Thursday.
The higher operating expenses came mostly from an increase in personnel for sales and client services. The Kansas-based company's adjusted operating expenses in the fourth quarter were $749 million, a 9% increase over the same period the previous year.
The result was a decrease in net earnings from $166.1 million in the fourth quarter of 2015 to $149.7 million in the fourth quarter of last year.
Cerner also saw an 8% dip in systems sales in the fourth quarter, compared to the year-ago fourth quarter, caused by decreased technology resale and software. But that loss was balanced out by an increase in revenue from support, maintenance, and services; services revenue was up 18% in the fourth quarter compared to the fourth quarter of 2015, and support and maintenance revenue was up 3%.
Overall revenue in the fourth quarter was up too, rising 7% over the year before to hit $1.258 billion, with the largest portion coming from services. The fourth quarter revenue fell in the middle of the company's guidance range—unlike the previous quarter, during which the company failed to meet its guidance.
Revenue was not affected by the U.S. presidential election, Cerner president Zane Burke said, “as most of our solutions are at a high strategy level.” It's too soon to know what effects the new administration will have, but it's almost certain that the move towards value-based care will continue.
Cerner is optimistic about the first quarter of 2017 and expects to see growth, with predicted revenue up 9% to between $1.2 billion and $1.275 billion.