Last week Cerner released their 2Q numbers which were largely inline with what the market was expecting. Revenues were up 6% to $1.29 bn, with the more important numbers of Bookings, up 16% to an all time high of $1.64 bn. Revenue Backlog was up 11% to $16.65bn. On the profit side of things, Adjusted Net Income was up 3% to $206 million, which translated into EPS of $0.61, 5% higher (thank you share repurchase program).
Two noteworthy new customers signed up during the last quarter were, LifePoint Health and the Department of Veterans. LifePoint Health operate 72 hospitals, the rollout is only in a handful of their hospitals for now but in time you would imagine all the hospitals will be running on Cerner systems. For the Department of Veterans, they were elected as lead in "next-generation electronic health record system". Things are still in the planning phase and contracts are still being signed. Of significance though is Cerner beating out the competition to be chosen by a large government department.
Going forward the company gave guidance that their Full Year(FY) Revenue should be around 8% higher and that FY EPS should be around 6% - 11% higher, meaning that the current P/E ratio of 32 isn't cheap. The market gives Cerner this premium due to the long term steady growth potential from the company, where they have a very healthy operating margin of 19.3%. Also, only 10% of their revenues comes from outside of the US, once they are done conquering the US the rest of the globe will be ready for the taking.