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Cerner Shares Slip on Revenue Drop; CEO to Step Down

Cerner eased after the health-care-IT company reported higher profit and lower revenue, authorized a new buyback and said the CEO would step down.

Cerner  (CERN) - Get Cerner Corporation Report shares eased Wednesday after the healthcare-information-technology company reported higher profit and lower revenue, authorized a new buyback and said the CEO would step down.

Net income rose to $172.3 million, or 56 cents a share, from $147.2 million, or 47 cents a share, in the year-earlier quarter. The latest adjusted earnings were 76 cents a share. 

Revenue registered $1.39 billion in the quarter, down 1.4% from $1.41 billion.

A survey of analysts by FactSet produced consensus estimates of GAAP earnings of 58 cents a share, or an adjusted 74 cents, on revenue of $1.4 billion.

Cerner also said Chairman and Chief Executive Brent Shafer, who joined in 2018, is leaving. Shafer has agreed to continue in office until the company finds a new CEO.

Dow Jones reported that Shafer's departure didn't result from any disagreement with the company.

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Cerner shares recently traded at $73.74, down 2.3%. They firmed 2% over the past six months.

The new buyback is $3.75 billion, authorized through the end of 2023. It comes on top of the $465 million currently authorized for buyback. The company forecast total 2021 share repurchases of up to $1.5 billion.

“With our strong balance sheet and anticipated future cash flow, we are well-positioned to continue making investments in growth while also executing a balanced capital allocation strategy,” Chief Financial Officer Mark Erceg said in a statement.

The company forecast full-year 2021 revenue growth in the mid-single digits percent, "which replaces the prior dollar range of $5.75 billion to $5.95 billion but reflects similar growth." The FactSet call: $5.82 billion.

Last year, Cerner sold its RevWorks services business and commercial, non-federal client relationships to health information services company R1 RCM  (RCM) - Get R1 RCM Inc Report.

In other health technology news, several analysts last week cut their share-price targets for online healthcare provider Teladoc Health  (TDOC) - Get Teladoc Health, Inc. Report.