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Cerner Third Quarter Earnings Preview
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CERN
When Cerner (Nasdaq:CERN) releases its third quarter earnings on Thursday, October 25, 2012, it is expected to report earnings that are up 22.2% from a year ago. The consensus estimate is 55 cents per share, up from earnings of 45 cents per share a year ago.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 12 Things You Need To Know About Financial Statements
What to Expect: The consensus estimate, while unchanged in the past month, is down from 56 cents three months ago. Analysts are projecting earnings of $2.22 per share for the fiscal year.
Cerner is expected to beat last year's reported revenue of $571.6 million and come in at $652.8 million for the quarter. Revenue for the fiscal year is expected to come in at $2.62 billion.
Company Performance: Revenue increases have been in the double digits for the past four quarters. On average, the figure has risen by 24.7%. The biggest change came in the first quarter when revenue rose 30.4%.
CERN's P/E ratio of 34.5 is under the industry average of 71.51. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Investment Valuation Ratios: Price/Earnings Ratio
The stock price has fallen 6.7% to $70.43 from $75.48 since July 24, 2012. October 4, 2012 to October 10, 2012 marked one of Cerner's worst periods, as the share price fell $4.31.
The Competition: Cerner Corporation designs and supports healthcare devices, healthcare information technology, and content solutions for organizations and consumers. Most analysts (nine of 17) rate Cerner a buy.
The company's closest competitor in the software and programming industry is Allscripts Healthcare (MDRX). Analysts are more optimistic about Cerner than about Allscripts Healthcare. Only four out of 18 analysts rate the latter a buy.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 12 Things You Need To Know About Financial Statements
What to Expect: The consensus estimate, while unchanged in the past month, is down from 56 cents three months ago. Analysts are projecting earnings of $2.22 per share for the fiscal year.
Cerner is expected to beat last year's reported revenue of $571.6 million and come in at $652.8 million for the quarter. Revenue for the fiscal year is expected to come in at $2.62 billion.
Company Performance: Revenue increases have been in the double digits for the past four quarters. On average, the figure has risen by 24.7%. The biggest change came in the first quarter when revenue rose 30.4%.
The stock price has fallen 6.7% to $70.43 from $75.48 since July 24, 2012. October 4, 2012 to October 10, 2012 marked one of Cerner's worst periods, as the share price fell $4.31.
The Competition: Cerner Corporation designs and supports healthcare devices, healthcare information technology, and content solutions for organizations and consumers. Most analysts (nine of 17) rate Cerner a buy.
The company's closest competitor in the software and programming industry is Allscripts Healthcare (MDRX). Analysts are more optimistic about Cerner than about Allscripts Healthcare. Only four out of 18 analysts rate the latter a buy.
by
Investopedia Staff
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