Cerner revenues up 18 percent in 4th quarter

KANSAS CITY, MO – The economy may be in crisis, but Cerner Corp. has a rosy outlook. The Kansas City-based healthcare IT company posted a better-than-expected fourth quarter result on Tuesday, with revenues up 18 percent.

Executives credited the company's broad global client base for its success.

"The large size and geographic diversity of our client base and the deep strategic relationships with those clients contributed to our ability to deliver solid results in a difficult environment," said Cerner founder and CEO Neal Patterson.

"We are pleased with our fourth quarter and full-year 2008 results, which reflect good execution in a challenging economic environment," Patterson said. "We delivered solid bookings, revenue and earnings and record levels of cash flow."

"We are cautiously optimistic that we will continue to generate solid results," he said, adding that Cerner is well positioned to take advantage of the Obama administration's focus on healthcare IT as a necessary piece of healthcare reform.

Sean Weil, an analyst with Piper Jaffrey, concurs that Cerner is well positioned for the stimulus package making its way through Congress.

"Cerner is one of a handful of companies that can benefit from both the hospital and physician stimulus incentives," he said in an analysis issued Wednesday.

In addition, Weiland said Cerner's size and scale likely afford it the capital it needs to execute.

Cerner's bookings in the fourth quarter of 2008 were $404.9 million, near the record level of $406.6 million recorded in the fourth quarter of 2007. Fourth quarter revenue increased 18 percent, to $465.7 million, over the same period a year ago.

Net earnings were $71.5 million compared with fourth quarter 2007 net earnings of $41.3 million.

Other fourth-quarter highlights:

Cash collections of $441 million and record operating cash flow of $98 million.Days sales outstanding of 92 days compared to 93 days in the third quarter of 2008 and 90 days during the same quarter last year.Total revenue backlog of $3.5 billion, up 7 percent over the same quarter a year ago. This is composed of $2.9 billion of contract backlog and $0.6 billion of support and maintenance backlog.