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Omnicell, Inc. (OMCL - Free Report) reported third-quarter 2020 adjusted earnings per share (EPS) of 60 cents, down 21% year over year. The metric, however, exceeded the Zacks Consensus Estimate by 20%.
The adjustments include expenses related to share-based compensation, amortization expenses, severance and other.
On a GAAP basis, earnings per share were 20 cents for the quarter under review compared with EPS of 46 cents in the year-ago quarter.
Revenues in Detail
Third-quarter revenues of $213.7 million dropped 6.6% year over year on a reported basis (same on adjusted basis). The figure, however, beat the Zacks Consensus Estimate by 2.4%.
Segmental Details
On a segmental basis, Product revenues fell 10.2% year over year to $151.3 million in the reported quarter.
Service and other revenues climbed 3.4% year over year to $62.4 million.
Although the company’s year-over-year revenues declined largely due to delays in bookings and implementations related to COVID-19, there was a 7% sequential improvement with the economy gradually getting back to normalcy.
Operational Update
In the quarter under review, the adjusted gross profit declined 13.7% to $96.8 million. Further, adjusted gross margin contracted 372 basis points (bps) to 45.3%.
Adjusted operating expenses were $86.6 million in the third quarter, down 0.9% year over year. Adjusted operating profit totaled $10.2 million, reflecting a 58.8% fall from the prior-year quarter. Adjusted operating margin in the third quarter contracted 602 bps to 4.8%.
Financial Update
Omnicell exited the third quarter with cash and cash equivalents of $629.2 million compared with $127.2 million at the end of 2019.
Cumulative cash flow from operating activities at the end of the third quarter was $109.4 million compared with $110.2 million a year ago.
Guidance
Omnicell noted that its customers resumed their pre-COVID purchasing patterns. The company also stated that its customers are still navigating the impact of COVID-19 and are in dire need for the company’s medication management automation solutions more strategically.
Based on this assumption, the company is confident about its outlook for the remainder of the year and for 2021. Therefore, Omnicell reinstated its pre-pandemic product bookings guidance of $865 million to $900 million for the full year, originally provided in February. This includes bookings that were paused due to COVID in the first half, which either have been booked already in the third quarter or expected to be booked in the fourth quarter.
Adjusted EPS for the full year is expected in the range of $2.35-$2.40. The Zacks Consensus Estimate is pegged at $2.23 per share.
The company has also decided to accelerate its planning process for 2021. Accordingly, it provided its preliminary 2021 revenue guidance in the range of $1.015 billion to $1.045 billion. The current Zacks Consensus Estimate for the same is pegged at $981.1 million.
Our Take
Omnicell exited the third quarter with better-than-expected revenues and earnings. The top line, though down year over year, improved sequentially. The improvement in Service and other revenues despite the pandemic-led business challenges is impressive. However, contraction of both margins in the reported quarter was discouraging.
However, the company’s optimism about the gradual resumption of elective surgeries and some on-site sales activities in regions less impacted by the pandemic is encouraging. On the assumption that its customers have resumed their pre-COVID purchasing patterns, the company has reinstated its pre-pandemic product bookings guidance for 2020.
Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.
Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.
AngioDynamics reported first-quarter fiscal 2021 adjusted earnings per share (EPS) of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.
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Omnicell (OMCL) Q3 Earnings Top, Pre-COVID-19 View Reinstated
Omnicell, Inc. (OMCL - Free Report) reported third-quarter 2020 adjusted earnings per share (EPS) of 60 cents, down 21% year over year. The metric, however, exceeded the Zacks Consensus Estimate by 20%.
The adjustments include expenses related to share-based compensation, amortization expenses, severance and other.
On a GAAP basis, earnings per share were 20 cents for the quarter under review compared with EPS of 46 cents in the year-ago quarter.
Revenues in Detail
Third-quarter revenues of $213.7 million dropped 6.6% year over year on a reported basis (same on adjusted basis). The figure, however, beat the Zacks Consensus Estimate by 2.4%.
Segmental Details
On a segmental basis, Product revenues fell 10.2% year over year to $151.3 million in the reported quarter.
Service and other revenues climbed 3.4% year over year to $62.4 million.
Although the company’s year-over-year revenues declined largely due to delays in bookings and implementations related to COVID-19, there was a 7% sequential improvement with the economy gradually getting back to normalcy.
Operational Update
In the quarter under review, the adjusted gross profit declined 13.7% to $96.8 million. Further, adjusted gross margin contracted 372 basis points (bps) to 45.3%.
Omnicell, Inc. Price, Consensus and EPS Surprise
Omnicell, Inc. price-consensus-eps-surprise-chart | Omnicell, Inc. Quote
Adjusted operating expenses were $86.6 million in the third quarter, down 0.9% year over year. Adjusted operating profit totaled $10.2 million, reflecting a 58.8% fall from the prior-year quarter. Adjusted operating margin in the third quarter contracted 602 bps to 4.8%.
Financial Update
Omnicell exited the third quarter with cash and cash equivalents of $629.2 million compared with $127.2 million at the end of 2019.
Cumulative cash flow from operating activities at the end of the third quarter was $109.4 million compared with $110.2 million a year ago.
Guidance
Omnicell noted that its customers resumed their pre-COVID purchasing patterns. The company also stated that its customers are still navigating the impact of COVID-19 and are in dire need for the company’s medication management automation solutions more strategically.
Based on this assumption, the company is confident about its outlook for the remainder of the year and for 2021. Therefore, Omnicell reinstated its pre-pandemic product bookings guidance of $865 million to $900 million for the full year, originally provided in February. This includes bookings that were paused due to COVID in the first half, which either have been booked already in the third quarter or expected to be booked in the fourth quarter.
Adjusted EPS for the full year is expected in the range of $2.35-$2.40. The Zacks Consensus Estimate is pegged at $2.23 per share.
The company has also decided to accelerate its planning process for 2021. Accordingly, it provided its preliminary 2021 revenue guidance in the range of $1.015 billion to $1.045 billion. The current Zacks Consensus Estimate for the same is pegged at $981.1 million.
Our Take
Omnicell exited the third quarter with better-than-expected revenues and earnings. The top line, though down year over year, improved sequentially. The improvement in Service and other revenues despite the pandemic-led business challenges is impressive. However, contraction of both margins in the reported quarter was discouraging.
However, the company’s optimism about the gradual resumption of elective surgeries and some on-site sales activities in regions less impacted by the pandemic is encouraging. On the assumption that its customers have resumed their pre-COVID purchasing patterns, the company has reinstated its pre-pandemic product bookings guidance for 2020.
Zacks Rank and Stocks to Consider
Omnicell currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific (TMO - Free Report) , Align Technology (ALGN - Free Report) and AngioDynamics (ANGO - Free Report) , each sporting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.
Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.
AngioDynamics reported first-quarter fiscal 2021 adjusted earnings per share (EPS) of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>