Cerner to Buy Back Shares; Enters Alliance with American Well
With shares of Kansas City-based Cerner Corp. (NASDAQ: CERN – $49.20) trading near their lowest levels of the year, the company announced plans to buy back $500 million worth of its common stock. The repurchase would cover 10.3 million shares at prevailing prices, or 3.1% of its shares outstanding. The previous $300 million stock repurchase program approved in March has been completed. Shares of the healthcare information technology company have lost ground recently after a disappointing earnings report and lower guidance. Separately, Cerner announced an agreement with American Well, a leading national telehealth company, to jointly deliver a virtual health care experience that will integrate the American Well platform with Cerner’s electronic health record. The integration will enable providers to manage the health and care of patients beyond the walls of the health system.
Cerner remains well positioned to target the large hospital market, and notes that it is having success in winning business from its large competitors, including replacing them in some instances. While the results have disappointed since chosen for aggressive accounts, I will continue to hold on to the shares for recovery.