Cerner, the Kansas City-based EHR (electronic health record) vendor, announced that the company’s Q1 earnings, reported at $1.3 billion, were below expected levels.
This admission from Cerner President Zane Burke came despite a 3-percent increase in year-over-year revenue. “Our results in the first quarter included strong bookings and cash flow and in-line earnings, but our revenue was below expected levels,” Burke said in a statement this week. “Our mixed results and revised outlook reflect the delay of a large contract and a less predictable end market. However, we remain optimistic about our long-term growth opportunities due to our strong market position and portfolio of solutions and tech-enabled services that align with the pressures health care stakeholders are facing.”
The company reported that bookings in the first quarter of 2018 were $1.4 billion, an increase of 12 percent, compared to $1.25 billion in the first quarter of 2017. Cerner additionally reported $160 million net earnings for Q1 2018, and diluted earnings per share were $0.48. That is compared to 2017 when the company reported $173.2 million in net earnings in the first quarter of last year, resulting in diluted earnings per share at $0.52.
Interestingly, as reported by news media outlets, Burke said on the earnings call this week that the delay in the Cerner-VA (Department of Veterans Affairs) EHR contract has contributed to the less-than-expected revenue. Although Burke said on the call that the VA contract is expected to be signed, he couldn’t give a firm estimate of when that might come.
Cerner’s president also noted that stakeholders are still in support of the deal, pointing to the House Appropriations Committee funding bill that was recently released, which included $1.2 billion in 2019 for the new VA EHR system. Negotiations to this point have been stalled, and with President Trump’s ousting of David Shulkin, M.D., as VA Secretary in late March, uncertainties regarding the deal continue to linger.
