The Zacks Analyst Blog Highlights: Cerner, Streamline Health Solutions, Alere, Boston Scientific and Toyota Motor Corp.

Zacks

For Immediate Release
 
Chicago, IL – October 1, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Cerner Corp. (CERN-Free Report), Streamline Health Solutions, Inc. (STRM-Free Report), Alere Inc. (ALR-Free Report), Boston Scientific Corp. (BSX-Free Report) and Toyota Motor Corp. (TM-Free Report).
 
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Here are highlights from Monday’s Analyst Blog:

Cerner Rises on Partnership Deal
 
Shares of Cerner Corp. (CERN-Free Report) rose nearly 8% following the announcement of a multiyear partnership with Intermountain Healthcare. It was close to the 52-week high of $55.07.

Intermountain is a Utah-based non-profit health care provider. It has 22 hospitals, 185 clinics, a medical group comprising 1,000 physicians and a health plans division. The partnership agreement will implement Cerner’s electronic medical record and revenue cycle solutions across all of Intermountain's hospitals and clinics.

The partnership will also develop a new set of tools for a post-fee-for-service world in areas such as activity-based costing. As per the agreement, staffs from Cerner will relocate to Salt Lake City, Utah and work with Cerner Intermountain’s executives. The partnership is expected to generate more than $50 million in annual revenue to CERN.

Cerner reported a 14.3% rise in second-quarter 2013 earnings per share to 32 cents, meeting the Zacks Consensus Estimate. Net income rose 15.4% year over year to $112.9 million.

Revenues in the quarter rose 11.0% year over year to $707.6 million. However, it missed the Zacks Consensus Estimate of $724 million. The sales growth was at the lower end of Cerner’s earlier assumptions due to reduced volume of tech resale, which carries a lower margin.

For the third quarter of 2013, CERN forecasts sales in a band of $740 million–$770 million. Earnings per share, before share based compensation expense, are expected in the range of 35 cents to 36 cents. Cerner projects stock-based compensation costs to dilute second quarter earnings by about 2 cents to 3 cents.

For 2013, the company continues to forecast sales in the region of $2,950 million to $3,050 million. Earnings per share, before share-based compensation expense, are forecasted in the range of $1.40 and $1.42 (earlier $1.39 and $1.42). Cerner projects stock-based compensation costs to dilute earnings by about 8 cents to 9 cents.

Currently, Cerner carries a Zacks Rank #3 (Hold). Other medical information systems stocks that are worth a look include Streamline Health Solutions, Inc. (STRM-Free Report) with a Zacks Rank #2 (Buy). These apart, we consider medical product stocks such as Alere Inc. (ALR-Free Report) with a Zacks Rank #1 (Strong Buy) and Boston Scientific Corp. (BSX-Free Report) with a Zacks Rank #2 (Buy).
 
Toyota Shares Drop on Sienna Recall
 
Toyota Motor Corp.’s (TM-Free Report) share price dropped 1.3% to $130.26 on Sep 27, following its announcement of recalling 615,000 Sienna minivans in the U.S. The automaker is recalling the vehicles of model years 2004-2005 and 2007-2009 to fix a problem in the shift lever assembly.

Toyota has made several recalls and the drop in share price might be a reflection of shareholders’ fading confidence owing to that. Product recalls, amid the competitive scenario, can seriously dent a brand’s image.

Toyota said that a possible damage to the shift lock installed in the vehicle may lead the minivan to move out of the park position even if the brake pedal is not pressed. As a result of this, 21 accidents and 2 injuries were registered.

Earlier this month, Toyota recalled 369,000 vehicles worldwide, including about 235,000 in the U.S., roughly 74,000 in Japan and 37,500 in Europe. The automaker will recall 200,000 Highlander Hybrid models manufactured from 2006 to 2010 and Lexus RX 400h vehicles developed during 2006 to 2008 to fix a hybrid-system problem. The SUV transistors get overheated in the hybrid system, which results in sudden halt of the vehicle.

Toyota also announced the recall of another 169,000 vehicles including Lexus IS 350, IS 350C and GS 350 manufactured between 2006 and 2011. Toyota is recalling these vehicles to repair an engine bolt defect. These vehicles also face the problem of halting suddenly as bolts get loose in the variable valve timing control device.

Automotive safety recalls were brought into focus by media after Toyota’s announcement of the largest global recall of 3.8 million vehicles in Sep 2009, triggered by a high-speed crash that claimed 4 lives. Later on, Toyota had to face numerous personal injury and wrongful death lawsuits in federal courts, hampering its image.
 
 
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