Cerner Corporation (NASDAQ: CERN) stock fell over 2.5% in the pre-market session of Feb 11th, 2021 (Source: Google finance) after the company posted lower than expected results for the fourth quarter of FY 20. CERN in the fourth quarter of FY 20 has reported the adjusted earnings per share of 78 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 78 cents, according to the Zacks Consensus Estimate. The company had reported 3 percent fall in the adjusted revenue to $1.40 billion in the fourth quarter of FY 20. This decline is due to the impact of divestitures and the pandemic. Excluding divestitures, revenue growth over the fourth quarter of 2019 would have been approximately 1%, still due to the impact of the pandemic
The company has delivered increase in Adjusted Operating Margin (non-GAAP) to 21.5% compared to 20.3% in year-ago quarter. The company’s bookings were of $1.683 billion for the fourth quarter, within the Company’s expected range. The company has generated GAAP Cash flow from operating activities of $513 million and Free Cash Flow (non-GAAP) of $396 million. In the fourth quarter, the Days sales outstanding were of 76 days, down from 81 days in the third quarter of 2020. During the quarter, the company had Revenue Backlog of $13.04 billion.
Moreover, the company has made recent investment in Elligo Health Research and reached agreement to acquire Kantar Health. The company is nearing $300 million in annualized cost reductions since beginning the transformation efforts about two years ago. As part of the portfolio management process, the company has simplified the product set to go from offering more than 25,000 features to fewer than 400 products. The company has also divested the RevWorks outsourcing business and some non-core global assets.
The company expects first quarter 2021 revenue to be in the range of $1.370 billion and $1.420 billion and full year 2021 revenue to be in the range of $5.750 billion and $5.950 billion. First quarter 2021 Adjusted Diluted Earnings Per Share is expected to be in the range of $0.72 and $0.76 and full year 2021 Adjusted Diluted Earnings Per Share to be in the range of $3.10 and $3.20. The company projects first quarter 2021 new business bookings to be in the range of $1.150 billion and $1.350 billion. The Company anticipates project and sales activity to continue improving, there is still uncertainty regarding the duration and magnitude of the impact of the COVID19 pandemic.