Cerner has strong Q3 after Siemens deal

Reports good bookings, revenue, earnings, cash flow
By Mike Miliard
11:23 AM

In the first batch of financial results reported since its acquisition of Siemens was announced in August, Cerner Corporation showed a robust third quarter on Thursday.

Bookings in Q3 were $1.1 billion – an all-time high for a third quarter and an increase of 19 percent compared with $928 million for the same period in 2013.

Third quarter revenue was $840.1 million, meanwhile – an increase of 15 percent compared to $727.8 million Q3 2013.

On a GAAP basis, third quarter 2014 net earnings were $129.0 million; adjusted non-GAAP net earnings for Q3 were $145.3 million. Adjusted net earnings excluded expenses related to the Siemens acquisition.

Among other Q3 highlights: cash collections of $858.3 million and operating cash flow of $219.5 million; free cash flow of $107.1 million.

"Cerner's strong third quarter results reflect our ongoing execution and competitiveness in the U.S. and abroad," said Cerner CEO Neal Patterson, in a press statement. "The significant investments we have made in our solutions and services are contributing to our success."

With a nod toward the opportunities afforded by the soon-to-be finalized Siemens acquisition, he said, "I also believe we are positioned to thrive in the future because we are creating solutions that help our clients navigate the shift occurring in healthcare from being incented on volume and reactive care to being incented to keep people healthy, provide value and optimize outcomes."

Speaking on an earnings call Thursday, Cerner Chief Financial Officer Marc G. Naughton said the company is eyeing a close date of Feb. 2, 2015, for the Siemens deal.

"In the 2.5 months since we announced our intent to acquire them, we've had time to do additional analysis and get feedback from the marketplace," said Cerner President Zane Burke on the call. "I am pleased with the results of both.

"Additionally, we continue to be impressed with the quality of the clients and the people at Siemens Health Services," he said. "They will both be big assets to Cerner. Feedback from the marketplace has also been positive. Our existing client see value and the increased R&D investment that result from the acquisition, and we've already seen instances where the pending acquisition has improved our position in potential new EMR footprint opportunities in the Siemens Health Services client base."

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