Cerner 2Q numbers - beat on guidance

Cerner, the American supplier of health information technology solutions, services, devices and hardware, is one of our smaller holding in our offshore portfolios. They reported their second-quarter numbers on Thursday last week.

I am happy to say that the company released a positive surprise for the quarter. Sales grew 5.9% to $1.37 billion surging past their forecasted projections of between $1.31 billion and $1.36 billion. This was thanks to their professional services growing revenues by 13% year-on-year to $447.3 million. Managed services grew revenues by 9% to $285.6 million and Licensed software revenues also jumped 10.6% to $172.4 million, a solid print.

The company is spending a significant amount to improve customer experience in order to deliver superior client services. After all, the company is in the business of eliminating human error in the medical health facilities by leveraging digital solutions.

The company's president Zane Burke said the following:

I am pleased with our second-quarter results, which included all key metrics being at or above expected levels. Our results were solid across all of our major solution and services categories and included good contributions from U.S. and non-U.S. regions. Looking ahead, we believe our solutions and tech-enabled services are well aligned with the challenges providers and other healthcare stakeholders are facing, and we have a significant opportunity to grow as we help them with their transition to value-based care in coming years.

The company expects revenues to be between $1.335 billion and $1.385 billion for the third-quarter but keeping the full-year guidance the same between $5.325 billion and $5.45 billion.

Word on the street is that Cerner could be a potential buyer of its smaller rival Athenahealth. This is on the back of a management shakeup that led to the founding CEO Jonathan Bush being shown the door - accompanied by a well-worn boot planted in his backside. Athenahealth's board said that they're entertaining courtships at this stage for an outright sale or a merger.

This company fits right into the core of our healthcare and technology investment theme. The ride has certainly not been easy, but the company is doing some things right, which is why the share price closed up over 6% on Friday. The patient investor will be rewarded on this one.