Cerner has strong first quarter, but stocks fall regardless

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Cerner Corporation last week released a strong Q1 financial report which generally matched analysts' expectations, but regardless the company’s stocks dropped by at least 8 percent afterward, the Kansas City Business Journal reports.
           
The company reported new business bookings revenue for Q1 at $262.0 million, which is up 12 percent over the first quarter of 2005. According to Cerner this is an “all-time high level” for first quarter. Revenues for the quarter went up 22 percent to $321.2 million compared to $262.5 million from a year ago.

GAAP Q1 2006 net earnings were $20.1 million, and diluted earnings per share were $0.25. This compares very favorably to Q1 2005 GAAP net earnings of $12.5 million and diluted earnings per share were $0.16. Analysts' estimates for first quarter 2006 for diluted earnings per share were $0.27, so the company was slightly off the mark there.
           
These positive results didn’t seem to be enough to hold up the company’s stock price according to last week’s results, so perhaps the belief was that Cerner would exceed expectations rather than hit them.
           
For example, the company’s stock closed Thursday at $47.10, yet on Friday stocks had fallen to $43.30, down 8 percent, which is on volume of 1.4 million shares, the Kansas City Business Journal reports.

Cerner also released a Q2 forecast of 31 cents to 32 cents a share, which basically matches the consensus estimate at 31 cents.