Bookings posted by EHR giant Cerner fell well short of third-quarter expectations, but company executives vowed to make up for it by the end of the year.
Cerner posted $1.1 billion in bookings during the third quarter of 2017, down more than $300 million from last year’s third quarter and well below the company’s projections of $1.45-$1.6 billion. In an earnings call, Cerner’s Vice President and Chief Financial Officer Marc Naughton called the quarterly performance “disappointing,” but said the shortfall was due to large deals that were not finalized and will roll over into the fourth quarter.
The company’s third-quarter revenue was $1.28 billion, an 8% increase from last year’s third quarter. Long term, the company executives said they see opportunities in small providers with legacy systems, particularly those that have been acquired by larger systems, population health platforms and outsourced support services.
Cerner President Zane Burke attributed the less-active third quarter to “larger and more complex” contracts and the difficulty predicting timing of contracts in a post-Meaningful Use era.
“Even though we have a large pipeline, there isn’t an external set of dates creating urgency for clients to sign,” he said.
But the EHR developer is prepared to more than make up for it in the fourth quarter, projecting $1.75-$2 billion in bookings by the end of the year, bringing full-year estimated bookings growth to 8%. Those estimates do not include the Department of Veterans Affairs contract, although Naughton said the initial booking would be “relatively small.”
Burke added Cerner is “making good progress on the VA contract” and expects to sign the deal by the end of the year. The company also plans to announce finalized contracts with key partners that will assist with the VA’s EHR overhaul, which is expected to take 7-8 years.
Cerner provided no new plans for appointing a new CEO following the death of longtime CEO Neal Patterson in July.