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BioScrip (BIOS) Q2 Loss Wider Than Expected, Revenues Top
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BioScrip, Inc. incurred net loss of 14 cents per share from continuing operations in the second quarter of 2018 compared with net loss of 26 cents a year ago. The quarterly loss was wider than the Zacks Consensus Estimate of a loss of 10 cents per share.
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 $175.8 million, reflecting a 19.4% decline year over year. Per management, a shift in strategy to focus on growing BioScrip's core revenue mix including contract changes with the UnitedHealthcare (effective Sep 30, 2017) and the impact of implementing ASC 606 in 2018 caused this downside. However, the top line surpassed the Zacks Consensus Estimate of $169 million.
Notably, net revenues in the second quarter included core product mix of 75.1%, showing an improvement from 73.6% in the prior-year quarter.
Gross profit in the reported quarter was $59.9 million, down 11.3% year over year. However, gross margin expanded 311 basis points (bps) to 34.1%. General and administrative expenses were $10.9 million, representing a 13.2% rise from the amount incurred in second-quarter 2017. Adjusted operating income was $49 million, marking a 15.4% year-over-year fall. However, adjusted operating margin grew 132 bps year over year to 27.9%.
Financials
BioScrip exited second-quarter 2018 with cash and cash equivalents of $20.8 million compared with $30.4 million recorded at the end of the first quarter.
2018 Guidance
For 2018, the company has reiterated its earlier-provided revenue view of $688-$698 million. Per the company, the revenue projection has been adjusted for the implementation of ASC 606. The Zacks Consensus Estimate of $694.2 million lies within the company’s guided range.
Additionally, BioScrip still expects to incur restructuring expenses of $5-$6 million in 2018, primarily depicting costs related to redesigning and optimization of its revenue cycle management process.
The company currently expects 2018 net loss per share in the band of 34-40 cents, comparing favorably with the earlier prediction of a loss of 34-41 cents a share. The Zacks Consensus Estimate is pegged at a loss of 31 cents.
Our Take
BioScrip concluded the second quarter on a mixed note. Although revenues beat the consensus mark, the massive year-over-year decrease was a dampener. Additionally, the quarterly loss was wider than the Zacks Consensus Estimate.
Nonetheless, we are encouraged by the company’s progress in the second quarter, courtesy of its new multi-faceted CORE plan to improve its financial position. The company also expects to earn core revenues at Home Solutions and witness continued core growth proving to be accretive to its portfolio. The company also took certain rigorous steps to revitalize its sales force in the reported quarter. These developments should further drive its business growth in 2018.
Zacks Rank & Key Picks
BioScrip currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical sector, which reported solid results this earnings season, are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Align Technology, Inc. (ALGN - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Align Technology carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported second-quarter 2018 adjusted earnings per share (EPS) of $2.76, beating the Zacks Consensus Estimate of $2.48. Revenues totaled $909.3 million, also surpassing the consensus estimate of $870 million.
Chemed reported second-quarter 2018 adjusted EPS of $2.81, which topped the Zacks Consensus Estimate of $2.68. Revenues of $441.8 million edged past the Zacks Consensus Estimate of $432.3 million.
Align Technology posted second-quarter 2018 adjusted EPS of $1.30, steering past the Zacks Consensus Estimate of $1.09. Revenues came in at $490.3 million, outpacing the consensus mark of $462.9 million.
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BioScrip (BIOS) Q2 Loss Wider Than Expected, Revenues Top
BioScrip, Inc. incurred net loss of 14 cents per share from continuing operations in the second quarter of 2018 compared with net loss of 26 cents a year ago. The quarterly loss was wider than the Zacks Consensus Estimate of a loss of 10 cents per share.
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 $175.8 million, reflecting a 19.4% decline year over year. Per management, a shift in strategy to focus on growing BioScrip's core revenue mix including contract changes with the UnitedHealthcare (effective Sep 30, 2017) and the impact of implementing ASC 606 in 2018 caused this downside. However, the top line surpassed the Zacks Consensus Estimate of $169 million.
Notably, net revenues in the second quarter included core product mix of 75.1%, showing an improvement from 73.6% in the prior-year quarter.
BioScrip, Inc. Price, Consensus and EPS Surprise
BioScrip, Inc. Price, Consensus and EPS Surprise | BioScrip, Inc. Quote
Gross profit in the reported quarter was $59.9 million, down 11.3% year over year. However, gross margin expanded 311 basis points (bps) to 34.1%. General and administrative expenses were $10.9 million, representing a 13.2% rise from the amount incurred in second-quarter 2017. Adjusted operating income was $49 million, marking a 15.4% year-over-year fall. However, adjusted operating margin grew 132 bps year over year to 27.9%.
Financials
BioScrip exited second-quarter 2018 with cash and cash equivalents of $20.8 million compared with $30.4 million recorded at the end of the first quarter.
2018 Guidance
For 2018, the company has reiterated its earlier-provided revenue view of $688-$698 million. Per the company, the revenue projection has been adjusted for the implementation of ASC 606. The Zacks Consensus Estimate of $694.2 million lies within the company’s guided range.
Additionally, BioScrip still expects to incur restructuring expenses of $5-$6 million in 2018, primarily depicting costs related to redesigning and optimization of its revenue cycle management process.
The company currently expects 2018 net loss per share in the band of 34-40 cents, comparing favorably with the earlier prediction of a loss of 34-41 cents a share. The Zacks Consensus Estimate is pegged at a loss of 31 cents.
Our Take
BioScrip concluded the second quarter on a mixed note. Although revenues beat the consensus mark, the massive year-over-year decrease was a dampener. Additionally, the quarterly loss was wider than the Zacks Consensus Estimate.
Nonetheless, we are encouraged by the company’s progress in the second quarter, courtesy of its new multi-faceted CORE plan to improve its financial position. The company also expects to earn core revenues at Home Solutions and witness continued core growth proving to be accretive to its portfolio. The company also took certain rigorous steps to revitalize its sales force in the reported quarter. These developments should further drive its business growth in 2018.
Zacks Rank & Key Picks
BioScrip currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical sector, which reported solid results this earnings season, are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Align Technology, Inc. (ALGN - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Align Technology carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported second-quarter 2018 adjusted earnings per share (EPS) of $2.76, beating the Zacks Consensus Estimate of $2.48. Revenues totaled $909.3 million, also surpassing the consensus estimate of $870 million.
Chemed reported second-quarter 2018 adjusted EPS of $2.81, which topped the Zacks Consensus Estimate of $2.68. Revenues of $441.8 million edged past the Zacks Consensus Estimate of $432.3 million.
Align Technology posted second-quarter 2018 adjusted EPS of $1.30, steering past the Zacks Consensus Estimate of $1.09. Revenues came in at $490.3 million, outpacing the consensus mark of $462.9 million.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>