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Cerner Corp. Reports Operating Results (10-Q)

July 27, 2012 | About:
10qk

10qk

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Cerner Corp. (CERN) filed Quarterly Report for the period ended 2012-06-30.

Cerner Corporation has a market cap of $13.13 billion; its shares were traded at around $73.53 with a P/E ratio of 40.3 and P/S ratio of 6. Cerner Corporation had an annual average earning growth of 17.3% over the past 10 years. GuruFocus rated Cerner Corporation the business predictability rank of 4-star.

Highlight of Business Operations:

New business bookings, which reflects the value of executed contracts for software, hardware, professional services and managed services, was $700.5 million in the second quarter of 2012, which was an increase of 8% compared to $649.9 million in the second quarter of 2011. Revenues for the second quarter of 2012 increased 22% to $637.4 million compared to $524.2 million in the year-ago quarter. The year-over-year increase in revenue reflects ongoing demand related to “meaningful use” incentives that we believe are increasing the focus of health care providers on improving the efficiency and quality of health care through the use of information technology and related services. In addition, new initiatives, such as DeviceWorks and Cerner ITWorks, are contributing to growth.

Second quarter 2012 net earnings increased 36% to $97.8 million compared to $72.0 million in the second quarter of 2011. Diluted earnings per share increased 33% to $0.56 compared to $0.42 in the second quarter of 2011. Second quarter 2012 and 2011 net earnings and diluted earnings per share reflect the impact of stock-based compensation expense. The effect of these expenses reduced the second quarter 2012 net earnings and diluted earnings per share by $5.3 million and $0.03, respectively, and second quarter 2011 net earnings and diluted earnings per share by $4.1 million and $0.02, respectively.

Sales and client service expenses as a percent of total revenues were 38% in the second quarter of 2012, compared to 40% in the same period of 2011. These expenses increased 15% to $241.9 million in the second quarter of 2012, from $210.2 million in the same period of 2011. Sales and client service expenses include salaries of sales and client service personnel, depreciation and other expenses associated with our CernerWorks managed service business, communications expenses, unreimbursed travel expenses, expense for share-based payments, sales and marketing salaries and trade show and advertising costs. The decrease as a percent of revenue reflects ongoing efficiencies in our implementation and operational processes.

General and administrative expenses as a percent of total revenues were 6% in the second quarter of 2012, compared to 7% in the same period of 2011. These expenses increased 2% to $38.4 million in the second quarter of 2012, from $37.8 million for the same period in 2011. General and administrative expenses include salaries for corporate, financial and administrative staffs, utilities, communications expenses, professional fees, transaction gains or losses on foreign currency and expense for share based payments. The increase in general and administrative expenses was primarily driven by an increase in corporate personnel costs, as we have increased such personnel to support our overall revenue growth.

Sales and client service expenses as a percent of total revenues were 38% in the first six months of 2012, compared to 41% in the same period of 2011. These expenses increased 18% to $486.9 million in the first six months of 2012, from $411.6 million in the same period of 2011. The decrease as a percent of revenue reflects ongoing efficiencies in our implementation and operational processes.

Read the The complete Report

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10qk
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