Cerner’s Restructuring Measures Expand Q3 Earnings, Margins; Raises FY21 Guidance

By Benzinga
October 31, 2021 Updated: October 31, 2021

Cerner Corp. (CERN) reported Q3 FY21 revenue growth of 7 percent Y/Y to $1.47 billion, beating the analyst consensus of $1.45 billion.

Revenues from Licensed software rose 16.0 percent Y/Y to $199.2 million. Technology resale declined 20.2 percent Y/Y to $37.656.9 million. Subscriptions decreased 1.8 percent Y/Y to $91.8 million. Professional services expanded 15.0 percent Y/Y to $551.7 million. Managed services improved 3.6 percent Y/Y to $323.1 million. Support and maintenance declined 1.1 percent Y/Y to $257.0 million.

The adjusted operating margin expanded 150 bps to 21.9 percent.

Adjusted EPS of $0.86 beat the consensus of $$0.82.

Cerner generated a free cash flow of $312 million.

“The organizational transformation and productivity measures implemented earlier this year and additional ongoing product focus and cost control initiatives are strengthening our business,” said Mark Erceg, EVP & Chief Financial Office


Cerner sees Q4 adjusted EPS growth 10 percent–13 percent Y/Y; It raised FY21 adjusted EPS guidance from $3.25 to $3.30 (consensus $3.26).

The Company expects FY21 free cash flow of more than $950 million, compared to prior guidance of approximately $900 million.

Price action

CERN shares are trading 5.12 percent higher at $74.29 on the last check Friday.

By Vandana Singh

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