Cerner Corporation (CERN) entered the private health care sector in UAE by announcing a deal with Dubai-based physician helpline service provider Mobile Doctors (MD 24-7). The deal is a result of UAE government's strong initiatives for digitization in the health care industry.
With the deal, MD 24-7 will be able to implement mobility solutions from CERN. CERN’s patient portal will help MD 24-7's subscribers to access their electronic health record (:EHR) and schedule appointments with a doctor.
The portal will also help MD 24-7 subscribers take medical advice from a physician 24 hours a day and obtain assessments based on evidence-based medicine. Apart from the patient portal, MD 24-7 will implement CERN's ambulatory EHR and practice management solutions, as well as Cerner PureWellness and other solutions.
In the first quarter of 2014, CERN revealed a 9.7% rise in earnings per share to 34 cents from 31 cents in the comparable quarter of 2013. However, earnings were flat compared with the Zacks Consensus Estimate. Net earnings rose 8.6% to $119.5 million from $110.0 in the first quarter of 2013.
Revenues in the quarter grew 15.4% to $784.8 million, marginally exceeding the Zacks Consensus Estimate of $783 million. The increase can be attributed to stronger revenues from Support, maintenance and services, Reimbursed Travel, and System sales. Global revenues went down 16% due to tough comparables.
For the second quarter of 2014, CERN anticipates revenues between $790 and $830 million while adjusted earnings are expected between 36 and 37 cents per share, including share based compensation expense. These compared with the Zacks Consensus Estimates of $809 million and 36 cents for revenues and earnings per share, respectively for the quarter.
For full year 2014, CERN upgraded revenue guidance to the range of $3.25 to $3.40 billion from the prior range of $3.20 to $3.40 billion. Adjusted earnings are also expected to be higher at $1.52–$1.55, compared with the prior range of $1.51 to $1.55, including share based compensation expense. These compared with the Zacks Consensus Estimates of $3.3 billion and $1.54 for revenues and earnings per share, respectively for the year.
For 2014, CERN expects capital expenditures between $260 million and $280 million, down from $353 million in 2013. It also expects capitalized software to remain in the mid-$40 million range throughout the year.
Currently, CERN retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader healthcare sector include Cardica Inc. (CRDC), Eagle Pharmaceuticals Inc. (EGRX), and NeuroMetrix Inc. (NURO). All of them carry a Zacks Rank #2 (Buy).