Cerner Corp (CERN) has reported a 15.41 percent rise in profit for the quarter ended Oct. 01, 2016. The company has earned $169.98 million, or $0.49 a share in the quarter, compared with $147.28 million, or $0.42 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $202.64 million, or $0.59 a share compared with $188.73 million or $0.54 a share, a year ago.
Revenue during the quarter grew 5.02 percent to $1,184.56 million from $1,127.89 million in the previous year period. Gross margin for the quarter contracted 145 basis points over the previous year period to 15.45 percent. Total expenses were 79.55 percent of quarterly revenues, down from 80.91 percent for the same period last year. This has led to an improvement of 135 basis points in operating margin to 20.45 percent.
Operating income for the quarter was $242.22 million, compared with $215.35 million in the previous year period.
However, the adjusted operating income for the quarter stood at $288.69 million compared to $276.04 million in the prior year period. At the same time, adjusted operating margin contracted 10 basis points in the quarter to 24.37 percent from 24.47 percent in the last year period.
Operating cash flow improves significantly
Cerner Corp has generated cash of $822.37 million from operating activities during the nine month period, up 38.35 percent or $227.94 million, when compared with the last year period.
The company has spent $695.60 million cash to meet investing activities during the nine month period as against cash outgo of $1,347.56 million in the last year period.
The company has spent $94.46 million cash to carry out financing activities during the nine month period as against cash inflow of $388.30 million in the last year period.
Working capital increases
Cerner Corp has recorded an increase in the working capital over the last year. It stood at $1,170.26 million as at Oct. 01, 2016, up 21.34 percent or $205.83 million from $964.43 million on Oct. 03, 2015. Current ratio was at 2.41 as on Oct. 01, 2016, up from 2.15 on Oct. 03, 2015.
Cash conversion cycle (CCC) has decreased to 58 days for the quarter from 65 days for the last year period. Days sales outstanding went down to 76 days for the quarter compared with 83 days for the same period last year.
Days inventory outstanding has decreased to 1 days for the quarter compared with 3 days for the previous year period. At the same time, days payable outstanding was almost stable at 19 days for the quarter, when compared with the previous year period.
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