Cerner's Restructuring Measures Expand Q3 Earnings, Margins; Raises FY21 Guidance

Cerner Corp CERN reported Q3 FY21 revenue growth of 7% Y/Y to $1.47 billion, beating the analyst consensus of $1.45 billion.
Revenues from Licensed software rose 16.0% Y/Y to $199.2 million, Technology resale declined 20.2% Y/Y to $37.656.9 million, Subscriptions decreased 1.8% Y/Y to $91.8 million, Professional services expanded 15.0% Y/Y to $551.7 million, Managed services improved 3.6% Y/Y to $323.1 million, Support and maintenance declined 1.1% Y/Y to $257.0 million.
The adjusted operating margin expanded 150 bps to 21.9%.
Adjusted EPS of $0.86 beat the consensus of $$0.82.
Cerner generated a free cash flow of $312 million.
"The organizational transformation and productivity measures implemented earlier this year and additional ongoing product focus and cost control initiatives are strengthening our business," said Mark Erceg, EVP & Chief Financial Office
Outlook: Cerner sees Q4 adjusted EPS growth 10 %- 13% Y/Y; It raised FY21 Adjusted EPS guidance from $3.25 to $3.30 (consensus $3.26).
The Company expects FY21 free cash flow of more than $950 million, compared to prior guidance of approximately $900 million.
Price action: CERN shares are trading 3.06% higher at $72.84 during the market session on the last check Friday.