Cerner (CERN) Stock Falls on Weak Guidance

Cerner (CERN) shares are lower after the company guided below analysts' estimates for earnings and revenue in the fourth quarter.
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of Cerner (CERN) - Get Report were falling 6.5% to $61.78 with heavy trading volume on Wednesday after the healthcare information services guided below analysts' estimates for the fourth quarter.

After the market closed on Tuesday, Cerner said it expects to report earnings of 56 cents to 58 cents a share and revenue of $1.15 billion to $1.2 billion for the fourth quarter. Analysts expect the company to report earnings of 61 cents and revenue of $1.24 billion for the quarter.

Cerner reported earnings of 54 cents a share for the third quarter, in line with analysts' estimates. Revenue grew 34.5% year over year to $1.13 billion for the quarter, compared to analysts' estimates of $1.17 billion.

"The highlight of our results in the third quarter was our strong bookings, which again included a record number of new clients joining Cerner," Co-founder, Chairman, and CEO Neal Patterson said in a statement. "We have signed more new clients in the first three quarters of 2015 than any full-year in our history, and I attribute this success to our strong competitive position in an active marketplace."

About 6.4 million shares of Cerner were traded by 2:21 p.m. Wednesday, above the company's average trading volume of about 2.5 million shares a day.

TheStreet Ratings team rates CERNER CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate CERNER CORP (CERN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

You can view the full analysis from the report here: CERN

CERN data by YCharts

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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