Cerner Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Cerner (NASDAQ:CERN) will unveil its latest earnings on Thursday, October 25, 2012. Cerner Corporation designs and supports healthcare devices, healthcare information technology, and content solutions for organizations and consumers.

Cerner Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 55 cents per share, a rise of 22.2% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 56 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 55 cents during the last month. Analysts are projecting profit to rise by 26.1% versus last year to $2.22.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked profit of 56 cents per share versus a mean estimate of net income of 51 cents per share.

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A Look Back: In the second quarter, profit rose 35.8% to $97.8 million (56 cents a share) from $72 million (42 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 21.6% to $637.4 million from $524.2 million.

Wall St. Revenue Expectations: Analysts are projecting a rise of 14.2% in revenue from the year-earlier quarter to $652.8 million.

Stock Price Performance: Between July 26, 2012 and October 19, 2012, the stock price fell $7.61 (-9.8%), from $78.04 to $70.43. The stock price saw one of its best stretches over the last year between April 24, 2012 and May 2, 2012, when shares rose for seven straight days, increasing 14.9% (+$10.74) over that span. It saw one of its worst periods between October 3, 2012 and October 12, 2012 when shares fell for eight straight days, dropping 9.1% (-$7.25) over that span.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 24.7% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 29.1% in the fourth quarter of the last fiscal year and 37.4% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With nine analysts rating the stock a buy, one rating it a sell and seven rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.57 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 3.59 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 4.9% to $465.1 million while assets rose 4.4% to $1.66 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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