Cerner Corp. posted $1.3 billion in revenue for this year's second quarter, down 7% from the year-ago period and narrowly missing the company's own revenue expectations.
Cerner's net earnings were $134.7 million for the second quarter, up 6.1% from $127 million during the same period last year.
Company officials attributed the revenue drop to lower technology resale revenue, which decreased 30.7%, on account of the COVID-19 pandemic, as well as to the termination of a revenue cycle contract with Adventist Health in Roseville, Calif., in late 2019.
Cerner's subscription revenue also rose 2.5%, lower than expected, in part because of lower patient volumes as ambulatory visits dwindled at the height of the COVID-19 outbreak.
"Overall, we are pleased with our results and outlook given our prior guidance was provided in the early stages of an unprecedented environment," Marc Naughton, Cerner's chief financial officer, said on a call with investment analysts Wednesday.
Cerner in April had adjusted its revenue expectations for the full 2020 year, shifting the guidance range down by nearly $200 million. The company in April also said it expected to post between $1.34 billion and $1.39 billion in second-quarter revenue, a range it missed by about $10 million.
Although company officials said they expect project and sales activity to improve in the second half of the year, Cerner on Wednesday moved down its full-year revenue expectations again to reflect the "lower Q2, more current view of the COVID impact going forward and the anticipated sale of our remaining RevWorks services," Naughton said. R1 RCM in June announced an agreement to buy Cerner RevWorks for $30 million.
The company's new revenue guidance includes anticipated full-year revenue in the range of $5.45 billion and $5.55 billion, down from the $5.55 billion to $5.7 billion guidance range it issued in April.
The company posted $1.3 billion in bookings, down 6% from the year-ago quarter but more than $100 million above the high end of its guidance range issued in April, "primarily due to strong levels of managed services bookings in the quarter," according to Naughton.
The company posted $307.2 million in managed services for the quarter, up 3.2% year-over-year.
Cerner has continued to work on its EHR projects with the Defense Department and Veterans Affairs Department, despite the agencies' delaying rollouts amid COVID-19, said John Peterzalek, Cerner's chief client and services officer. Cerner plans to move forward with DOD implementations in the next few months, including a pilot site for the Coast Guard.
While the VA hasn't set a new go-live date for its EHR, Cerner is moving forward with implementing a scheduling tool at the health system, Peterzalek said.
"We're preparing for the first go-live and subsequent go-lives," he added. "The exact dates of those, while not public, have been proposed."
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