KANSAS CITY, MO – An analyst says Cerner may have posted 'lackluster' quarterly earnings Tuesday, but the healthcare IT company is well positioned to take advantage of available stimulus money.

For the first quarter of 2009, the Kansas City, Mo.-based company earned $40.8 million, or 49 cents a share, compared with $36.8 million, or 44 cents a share, in the same quarter last year. Bookings in the first quarter of 2009 were $332.8 million.  First quarter revenue increased 2 percent over the year-ago period to $392.3 million.

"Management indicated that they are starting to see some acceleration now, and estimates that their customer base is poised to receive $8 billion in stimulus payments," said Sean W. Wieland, senior research analyst with Piper Jaffrey. "In the near term there is a pause as clients are awaiting greater clarity on the definitions of 'meaningful use' and 'certified.' In our view, investors are looking beyond near-term weaknesses and are buying into the long-term upside."

"While the challenging economic environment impacted our top line results in the first quarter, we are pleased that we still delivered earnings at expected levels," said Neal Patterson, Cerner's co-founder, chairman and chief executive officer.  "We are also pleased with our strong cash flow performance, which reflects the sound health of our business."

"While it will likely be later this year before activity related to ARRA impacts our business," Patterson said, "we believe we are very well positioned to benefit due to our large and diverse footprint in healthcare, proven ability to deliver value to our clients and the strategic value of our solutions."

Wieland cites some things that could go wrong.

"First, around the definition of 'meaningful use,' if the bar is set too high, hospitals will be scared away. If the bar is set too low, hospitals will look towards lower-cost solutions to meet the requirements. And if the bar is not set, but rather the definition is delayed, the eventual impact to revenue would be delayed."

Among Cerner's first quarter highlights:

• Record cash collections of $457.7 million and strong operating cash flow of $97.8 million.
• Days sales outstanding of 102 days compared to 92 days in the fourth quarter of 2008 and 92 days in the first quarter of last year.
• Total revenue backlog of $3.6 billion, up 7 percent over the same quarter a year ago. This is comprised of $3 billion of contract backlog and $0.6 billion of support and maintenance backlog.