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BioScrip (BIOS) Q1 Loss Wider Than Expected, Revenues Beat
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BioScrip, Inc. reported net loss from continuing operations of 12 cents per share in the first quarter of 2018, compared with net loss of 18 cents a year ago. However, net loss was wider than the Zacks Consensus Estimate by a penny.
Revenues
With the completion of the non-core PBM business divestment, BioScrip now has a simplified business structure focused on core Infusion Services.
Net revenues in the quarter under review totaled $168.6 million, reflecting a 22.6% decline year over year. Per management, temporary supply deficit along with shutdown of some of the company’s branches due to severe winter weather conditions led to the downside. Further, the company’s shift in strategy to focus on growing core revenue mix was a major deterrent. However, the top line surpassed the Zacks Consensus Estimate of $167 million.
Notably, net revenues in the first quarter included core product mix of 75.4%, showing an improvement from 71.9% in the prior-year quarter.
Gross profit in the first quarter was $55 million, down 15.3% year over year. However, gross margin expanded 290 basis points (bps) to 32.7%. General and administrative expenses were $10.7 million, reflecting a 15.1% rise from first-quarter 2017. Adjusted operating income was $44.3 million, marking a 20.3% year-over-year decline. However, adjusted operating margin expanded 80 bps year over year to 26.3%.
BioScrip exited first-quarter 2018 with cash and cash equivalents of $30.4 million, compared with $39.5 million recorded at the end of the 2017.
2018 Guidance
For 2018, the company has updated the revenue view to $688-$698 million from the previous $710-$720 million. Per the company, the revenue guidance has been adjusted for the implementation of ASC 606. The Zacks Consensus Estimate of $710 million lies above the company’s guided range.
Additionally, BioScrip expects to incur restructuring expenses of $5-$6 million in 2018, primarily reflecting costs related to redesigning and optimizing of its revenue cycle management process.
The company continues to expect 2018 net loss per share in the band of 34-41 cents. Our consensus estimate of 28 cents for the same falls below the company’s guided range.
Our Take
BioScrip exited the first quarter on a mixed note. Although revenues beat the consensus mark, the massive year-over-year decline was a dampener.
Nonetheless, we are encouraged by the company’s progress in the first quarter, courtesy of its new multi-faceted CORE plan to improve financial position. The company also expects core revenues at Home Solutions and continued core growth to prove accretive to its portfolio. Moreover, we are upbeat about BioScrip’s completion of the UnitedHealthcare contract transition and projections of growth in core revenues. The company also took certain rigorous steps to revitalize its sales force in the reported quarter. These developments should drive business growth in 2018.
Zacks Rank & Key Picks
BioScrip has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed released first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
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BioScrip (BIOS) Q1 Loss Wider Than Expected, Revenues Beat
BioScrip, Inc. reported net loss from continuing operations of 12 cents per share in the first quarter of 2018, compared with net loss of 18 cents a year ago. However, net loss was wider than the Zacks Consensus Estimate by a penny.
Revenues
With the completion of the non-core PBM business divestment, BioScrip now has a simplified business structure focused on core Infusion Services.
Net revenues in the quarter under review totaled $168.6 million, reflecting a 22.6% decline year over year. Per management, temporary supply deficit along with shutdown of some of the company’s branches due to severe winter weather conditions led to the downside. Further, the company’s shift in strategy to focus on growing core revenue mix was a major deterrent. However, the top line surpassed the Zacks Consensus Estimate of $167 million.
Notably, net revenues in the first quarter included core product mix of 75.4%, showing an improvement from 71.9% in the prior-year quarter.
Gross profit in the first quarter was $55 million, down 15.3% year over year. However, gross margin expanded 290 basis points (bps) to 32.7%. General and administrative expenses were $10.7 million, reflecting a 15.1% rise from first-quarter 2017. Adjusted operating income was $44.3 million, marking a 20.3% year-over-year decline. However, adjusted operating margin expanded 80 bps year over year to 26.3%.
BioScrip, Inc. Price, Consensus and EPS Surprise
BioScrip, Inc. Price, Consensus and EPS Surprise | BioScrip, Inc. Quote
Financials
BioScrip exited first-quarter 2018 with cash and cash equivalents of $30.4 million, compared with $39.5 million recorded at the end of the 2017.
2018 Guidance
For 2018, the company has updated the revenue view to $688-$698 million from the previous $710-$720 million. Per the company, the revenue guidance has been adjusted for the implementation of ASC 606. The Zacks Consensus Estimate of $710 million lies above the company’s guided range.
Additionally, BioScrip expects to incur restructuring expenses of $5-$6 million in 2018, primarily reflecting costs related to redesigning and optimizing of its revenue cycle management process.
The company continues to expect 2018 net loss per share in the band of 34-41 cents. Our consensus estimate of 28 cents for the same falls below the company’s guided range.
Our Take
BioScrip exited the first quarter on a mixed note. Although revenues beat the consensus mark, the massive year-over-year decline was a dampener.
Nonetheless, we are encouraged by the company’s progress in the first quarter, courtesy of its new multi-faceted CORE plan to improve financial position. The company also expects core revenues at Home Solutions and continued core growth to prove accretive to its portfolio. Moreover, we are upbeat about BioScrip’s completion of the UnitedHealthcare contract transition and projections of growth in core revenues. The company also took certain rigorous steps to revitalize its sales force in the reported quarter. These developments should drive business growth in 2018.
Zacks Rank & Key Picks
BioScrip has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed released first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>