Cerner missed its own expectations for revenue in the first quarter as it took hits from a delayed Veterans Affairs Department EHR system contract and an unpredictable market.
The VA electronic health record system contract has been sitting in limbo for months and will likely be delayed until the second half of the year, according to Cerner Chief Financial Officer Mark Naughten. VA Secretary Dr. David Shulkin was ousted in Marchand the Trump administration is mulling his replacement.
"While this is disappointing, we continue to believe we have broad support from key stakeholders," Cerner President Zane Burke said. "We still expect to sign the contract—it's just difficult to predict exactly when."
Cerner's revenue in the first quarter was $1.3 billion, up just 3% compared to the first quarter of 2017. The boost stemmed from foreign markets, as domestic revenue remained flat. The company saw greater gains in bookings in the quarter, which were up 12% over a year ago and reached to $1.4 billion.
Along with the VA contract delay, Cerner also struggled with an unpredictable market, Burke said, citing mergers and acquisitions and competition for capital as challenges.
The company considers 2018 an "investment year," CEO Brent Shafer said.
The first quarter was Shafer's first as CEO. He took over from Cliff Illig, who had been interim CEO since July 2017 when co-founder Neal Patterson died.
Cerner's leadership team plans to follow a new strategic plan, Shafer said. The company will focus on client experience, technological innovation and profitable growth.