Benzinga | May 5, 2021 09:30AM EDT

Cerner Beats On Q1 Earnings, Approves $3.75B Share Buyback Plan, CEO Transition

* Cerner Corp (NASDAQ: CERN) reported a first-quarter FY21 revenue decline of 2% year-on-year to $1.388 billion, missing the analyst consensus of $1.4 billion. It clocked a 2% revenue growth excluding divestitures.

* Licensed software revenue rose 2.3% to $161.7 million; Technology resale revenue declined 11.3% to $45.7 million; Subscriptions revenue rose 5.7% to $99.8 million; Professional services revenue declined 3.3% to $494.4 million; Managed services revenue rose 2.6% to $317.4 million; Support and maintenance revenue declined 3.8% to $263.3 million; and Reimbursed travel revenue declined 59% to $5.5 million.

* Adjusted operating margin expanded 200 basis points 21.4%.

* Adjusted EPS of $0.76 beat the analyst consensus of $0.74.

* Cerner generated $450 million in operating cash flow, and it held $997.9 million in cash and equivalents at the end of Q1.

* The board approved a new share buyback program to enable repurchase up to $3.75 billion through Dec. 31, 2023.

* Guidance: Q2 revenue growth guidance is in the high single digits, and the Adjusted EPS growth guidance is 20%.

* The company had also initiated a CEO hunt. Brent Shafer will serve as the Chair and CEO during the transition, after which he will remain in an advisory role for a year.

* Price action: CERN shares traded higher by 0.11% at $75.56 in the premarket session on the last check Wednesday.