Cerner (CERN) Tops Q1 EPS by 2c, Offers Guidance, Announces CEO Succession Plan

Cerner (NASDAQ: CERN) reported Q1 EPS of $0.76, $0.02 better than the analyst estimate of $0.74. Revenue for the quarter came in at $1.39 billion versus the consensus estimate of $1.4 billion.

GUIDANCE:

Cerner sees FY2021 EPS of $3.20, versus the consensus of $3.16.

• Second quarter 2021 revenue growth in the high-single digits over the second quarter of 2020
• •Full year 2021 revenue growth in the mid-single digits, which replaces the prior dollar range of $5.750 billion to $5.950 billion, but reflects similar growth
• •Second quarter 2021 Adjusted Diluted EPS growth of approximately 20% over the second quarter of 2020
• •Full year 2021 Adjusted Diluted EPS of more than $3.20, which reflects an increase compared to the prior range of $3.10 to $3.20
• •Total 2021 share repurchases of up to $1.5 billion
  

New Share Repurchase Program
Cerner also announced today that its Board has approved a new share repurchase program, which allows the company to repurchase up to $3.75 billion through Dec. 31, 2023. This new program is incremental to the current repurchase program under which approximately $465 million remains available for repurchases. Cerner plans to repurchase shares opportunistically, subject to market conditions and other factors, including price, and intends to fund the program with cash from operations and debt.

CEO Succession Plan
Cerner also announced today that Brent Shafer and the Board have initiated a process to identify the company's next CEO. The Board has formed a CEO search committee and has retained a leading executive search firm to launch a comprehensive market search. In order to provide a smooth and orderly transition, Mr. Shafer plans to serve as chairman and CEO until the Board has identified and appointed a successor, after which he will serve as a senior advisor for one year.

"Cerner is on the right trajectory, with increased financial guidance based on actions we are taking to improve performance," Mr. Shafer said. "With the support of the entire organization, we have simplified the business while implementing a new operating model to make Cerner more efficient and effective. We have strengthened our senior leadership team, including the recent addition of Mark Erceg as our CFO, and I believe we now have the right team assembled to drive our company forward."

"On behalf of the Board, I want to thank Brent for his leadership, dedication and commitment to advancing client success and the quality of healthcare, particularly with the unprecedented events of the last year," said William Zollars, lead independent director of the Cerner Board. "The Board believes that now is the right time to identify a successor to Brent who will lead Cerner through its next chapter of growth and shareholder value creation."

Mr. Zollars continued, "Because succession planning is one of the Board's most important duties, we are proceeding on a comprehensive process to identify the best chief executive for Cerner. As the Board conducts its search, we are focused on selecting a strong leader with a proven track record of operating successfully while executing a strategy driven by innovation, performance excellence and world-class talent practices."

For earnings history and earnings-related data on Cerner (CERN) click here.

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