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Omnicell (OMCL) Beats on Q3 Earnings, Raises '19 EPS View

Omnicell, Inc.’s OMCL third-quarter 2019 adjusted earnings per share (EPS) of 76 cents outpaced the Zacks Consensus Estimate by 5.6%.

Also, adjusted EPS increased 20.6% from the year-ago figure and surpassed the company’s guided range of 67-72 cents as well.

Revenues in Detail

Revenues in the third quarter increased 11.9% year over year to $228.8 million. However, the top line missed the Zacks Consensus Estimate of $232.5 million.

Quarterly Details

On a segmental basis, Product revenues improved 12.6% year over year to $168.5 million in the reported quarter.

Moreover, Service and other revenues climbed 10.4% year over year to $60.3 million.

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Operational Update

In the quarter under review, Omnicell's adjusted gross profit rose 12.4% to $115.5 million. Further, adjusted gross margin expanded 20 basis points (bps) to 50.5%.

Omnicell, Inc. Price, Consensus and EPS Surprise

Omnicell, Inc. Price, Consensus and EPS Surprise
Omnicell, Inc. Price, Consensus and EPS Surprise

Omnicell, Inc. price-consensus-eps-surprise-chart | Omnicell, Inc. Quote

However, adjusted operating expenses were $77.6 million in the third quarter, up 7% year over year. Meanwhile, adjusted operating profit totaled $37.9 million, reflecting a 25.1% jump from the prior-year quarter. Adjusted operating margin in the third quarter too grew 180 bps to 16.6%.

Financial Update

Omnicell exited the third quarter with cash and cash equivalents of $137.2 million compared with $87.5 million at the end of the second quarter.

Guidance

For the fourth quarter of 2019, Omnicell expects adjusted revenues between $240 million and $246 million. The Zacks Consensus Estimate for the metric stands at $244.3 million, within the guided range.

On an adjusted basis, product revenues are forecast between $181 million and $186 million while service revenues are projected within $59-$60 million.

Fourth-quarter adjusted EPS is envisioned in the band of 75-80 cents. The Zacks Consensus Estimate for the same is pegged at 81 cents, above the upper end of the predicted range.

For 2019, adjusted revenues are now anticipated within $889-$895 million, narrowed from the earlier band of $886-$900 million. The Zacks Consensus Estimate for the same is pegged at $896.7 million, ahead of the guided range.

Product revenues for the full year are tightened to $653-$658 million (earlier guidance was $653-$663 million) while service revenues are tapered between $236 million and $237 million (past estimate: $233-$237 million).

Adjusted EPS is forecast between $2.79 and $2.84 for 2019, raised from the earlier range of $2.65-$2.82. The Zacks Consensus Estimate for the metric stands at $2.79, in line with the lower end of the guided range.

Our Take

Omnicell delivered better-than-expected third-quarter 2019 adjusted earnings. Although revenues lagged the mark, the top line registered strong year-over-year growth. The company continued to see solid segmental contributions. Expansion of gross and operating margins in the reported quarter is encouraging as well. The company issued an upbeat guidance for the fourth quarter and lifted its 2019 EPS view.

Currently, the company is working on product innovation through R&D. Moving ahead, Omnicell is expected to gain traction from product launches, strategic partnerships and digital transformation.

However, a tough competitive landscape acts as a dampener.

Zacks Rank

Omnicell currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are ResMed, Inc. RMD, Intutive Surgical, Inc. ISRG and Thermo Fisher Scientific Inc. TMO, all three carrying a Zacks Rank #2 (Buy).

ResMed reported first-quarter fiscal 2020 adjusted EPS of 93 cents, ahead of the Zacks Consensus Estimate by 6.9%. Revenues of $681.1 million too topped the consensus mark by 3.6%.

Intutive Surgical’ third-quarter 2019 adjusted EPS of $3.43 exceeded the Zacks Consensus Estimate by 21.2%. Moreover, revenues of $1.13 billion surpassed the consensus estimate of $1.06 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, beating the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion also beat the Zacks Consensus Estimate by 1.3%.

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Omnicell, Inc. (OMCL) : Free Stock Analysis Report
 
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ResMed Inc. (RMD) : Free Stock Analysis Report
 
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