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OSI Systems (OSIS) Q4 Earnings Beat, Up Y/Y on Cost Control
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OSI Systems (OSIS - Free Report) reported fourth-quarter fiscal 2020 earnings of $1.22 per share, which beat the Zacks Consensus Estimate by 7%. The figure increased 6.1% year over year.
However, revenues of $277 million lagged the Zacks Consensus Estimate by 2.9% and decreased 10.2% from the year-ago quarter.
Quarter Details
Security division (59.1% of revenues) revenues decreased 16.3% year over year to $163.6 million, negatively impacted by the downturn in airport traffic due to coronavirus.
During the reported quarter, OSI received orders worth roughly $60 million from a U.S. government customer to provide several platforms of cargo-inspection systems and solutions.
OSI Systems, Inc. Price, Consensus and EPS Surprise
OSI’s Albania and Puerto Rico turnkey programs continued to perform well in the quarter under review. It is also in discussions with the Mexican government to resume operations as the previous contract expired on Jun 6.
Optoelectronics and Manufacturing division (24.2% of net revenues) revenues declined 10.2% year over year to $74.7 million.
Healthcare division (20.7% of net revenues) revenues increased 15.4% to $57.5 million. The company witnessed increased demand for patient-monitoring solution from hospitals.
As of Jun 30, 2020, OSI Systems’ backlog was $861 million. The company’s book-to-bill ratio was approximately 1.0 during three months ended Jun 30.
On a GAAP basis, OSI’s fourth-quarter gross margin stayed at 36.7%. Favorable revenues fully offset the coronavirus-led reduction in top line.
On a GAAP basis, total operating expenses were $78.1 million, down 8.5% year over year. As a percentage of revenues, operating expenses increased 50 basis points(bps) on a year-over-year basis to 28.2%.
Sales, general & administrative (SG&A) expenses, on a GAAP-basis, decreased 9.2% to $60.3 million. Research & development (R&D) expenses decreased 21.1% to $12.8 million.
As a result, on a non-GAAP basis, OSI’s operating income came in at $34 million, down 0.5% year over year. Non-GAAP operating margin expanded 120 bps from the year-ago quarter to 12.3%.
Non-GAAP security division operating income came in at $25.4 million, down 3.5% year over year. Optoelectronics and Manufacturing division operating income came in at $7.2 million, down 18.7%.
However, healthcare division operating income came in at $10 million, up 52.4% from the year-ago quarter.
Balance Sheet
As of Jun 30, 2020, the company had cash and cash equivalents of $76.1 million compared with $101 as of Mar 31.
Long-term debt was $267.1 million as of Jun 30 compared with $264.8 million as of Mar 31.
Post Q4 Developments
OSI’s board authorized repurchase of up to 2 million shares, adding to the previously authorized purchase of 1 million shares for a total authorization of 3 million shares under its stock-repurchase program.
OSI also acquired SafeNSound, an innovative cloud-based healthcare solution provider.
Guidance
For fiscal 2021, OSI Systems expects revenues between $1.09 billion and $1.14 billion. Non-GAAP earnings are expected between $4.50 and $5.05 per share.
Security division is expected to continue to witness revenue slowdown in the first quarter of fiscal 2021.
Autodesk, Autohome and salesforce.com are set to report their quarterly results on Aug 25.
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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.
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OSI Systems (OSIS) Q4 Earnings Beat, Up Y/Y on Cost Control
OSI Systems (OSIS - Free Report) reported fourth-quarter fiscal 2020 earnings of $1.22 per share, which beat the Zacks Consensus Estimate by 7%. The figure increased 6.1% year over year.
However, revenues of $277 million lagged the Zacks Consensus Estimate by 2.9% and decreased 10.2% from the year-ago quarter.
Quarter Details
Security division (59.1% of revenues) revenues decreased 16.3% year over year to $163.6 million, negatively impacted by the downturn in airport traffic due to coronavirus.
During the reported quarter, OSI received orders worth roughly $60 million from a U.S. government customer to provide several platforms of cargo-inspection systems and solutions.
OSI Systems, Inc. Price, Consensus and EPS Surprise
OSI Systems, Inc. price-consensus-eps-surprise-chart | OSI Systems, Inc. Quote
OSI’s Albania and Puerto Rico turnkey programs continued to perform well in the quarter under review. It is also in discussions with the Mexican government to resume operations as the previous contract expired on Jun 6.
Optoelectronics and Manufacturing division (24.2% of net revenues) revenues declined 10.2% year over year to $74.7 million.
Healthcare division (20.7% of net revenues) revenues increased 15.4% to $57.5 million. The company witnessed increased demand for patient-monitoring solution from hospitals.
As of Jun 30, 2020, OSI Systems’ backlog was $861 million. The company’s book-to-bill ratio was approximately 1.0 during three months ended Jun 30.
On a GAAP basis, OSI’s fourth-quarter gross margin stayed at 36.7%. Favorable revenues fully offset the coronavirus-led reduction in top line.
On a GAAP basis, total operating expenses were $78.1 million, down 8.5% year over year. As a percentage of revenues, operating expenses increased 50 basis points(bps) on a year-over-year basis to 28.2%.
Sales, general & administrative (SG&A) expenses, on a GAAP-basis, decreased 9.2% to $60.3 million. Research & development (R&D) expenses decreased 21.1% to $12.8 million.
As a result, on a non-GAAP basis, OSI’s operating income came in at $34 million, down 0.5% year over year. Non-GAAP operating margin expanded 120 bps from the year-ago quarter to 12.3%.
Non-GAAP security division operating income came in at $25.4 million, down 3.5% year over year. Optoelectronics and Manufacturing division operating income came in at $7.2 million, down 18.7%.
However, healthcare division operating income came in at $10 million, up 52.4% from the year-ago quarter.
Balance Sheet
As of Jun 30, 2020, the company had cash and cash equivalents of $76.1 million compared with $101 as of Mar 31.
Long-term debt was $267.1 million as of Jun 30 compared with $264.8 million as of Mar 31.
Post Q4 Developments
OSI’s board authorized repurchase of up to 2 million shares, adding to the previously authorized purchase of 1 million shares for a total authorization of 3 million shares under its stock-repurchase program.
OSI also acquired SafeNSound, an innovative cloud-based healthcare solution provider.
Guidance
For fiscal 2021, OSI Systems expects revenues between $1.09 billion and $1.14 billion. Non-GAAP earnings are expected between $4.50 and $5.05 per share.
Security division is expected to continue to witness revenue slowdown in the first quarter of fiscal 2021.
Zacks Rank & Stocks to Consider
OSI currently carries a Zacks Rank #4 (Sell).
Autodesk (ADSK - Free Report) , Autohome (ATHM - Free Report) and salesforce.com (CRM - Free Report) are some better-ranked stock in the broader computer and technology sector. Currently, all the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Autodesk, Autohome and salesforce.com are set to report their quarterly results on Aug 25.
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 2021.
Click here for the 6 trades >>