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Omnicell (OMCL) Q4 Earnings Beat Estimates, Margins Down
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Omnicell, Inc. (OMCL - Free Report) reported fourth-quarter 2022 adjusted earnings per share (EPS) of 33 cents, a 64.1% plunge year over year. However, the metric remarkably beat the Zacks Consensus Estimate by 266.7%.
The adjustments include one-time expenses like share-based compensations, the amortization of acquired intangibles, acquisition-related expenses, severance-related expenses and others.
On a GAAP basis, the loss per diluted share was 64 cents in the fourth quarter compared to the EPS of 28 cents in the prior-year quarter.
For the full year, adjusted earnings were $3.0 per share, down 21.3% from the year-ago period. This figure exceeded the Zacks Consensus Estimate by 9.5%.
Revenues in Detail
Revenues for the fourth quarter totaled $297.7 million, down 4.3% year over year. The decline was mainly due to macroeconomic uncertainties, freezes and delays in the capital budget of health systems and ongoing customer labor shortages. The figure beat the Zacks Consensus Estimate by 3.9%.
Total revenues for 2022 were $1.29 billion, up 14.5% from the year-ago period. The reported figure was in line with the Zacks Consensus Estimate.
Segmental Details
On a segmental basis, product revenues declined 11.9% year over year to $196.9 million in the reported quarter.
Service and other revenues climbed 15% year over year to $100.7 million.
In the quarter under review, the adjusted gross profit declined 18.4% to $121.8 million. The adjusted gross margin contracted 710 basis points (bps) to 40.9%.
Operating expenses were $160.1 million in the fourth quarter, up 16.3% year over year. The operating loss in the quarter totaled $38.4 million compared to the operating profit of $11.5 million in the year-ago quarter. The adjusted operating margin in the fourth quarter contracted 1661 bps to 12.9%.
Financial Update
Omnicell exited 2022 with cash and cash equivalents of $330.4 million compared with $349.1 million at the end of 2021.
The cumulative cash flow from operating activities at the end of 2022 was $77.8 million compared with $231.8 million a year ago.
2023 Outlook
Omnicell provided its guidance for the full year 2023 and the first quarter. Total revenues for 2023 are expected in the range of $1.15-$1.19 billion, with product revenues in the band of $740-$760 million and service revenues projected in the band of $410-$430 million. The Zacks Consensus Estimate for total revenues is pegged at $1.20 billion.
The adjusted EPS for the full year is expected in the range of $1.55-$1.80 per share. The Zacks Consensus Estimate for the same is pegged at $1.96.
For the first quarter of 2023, Omnicell expects revenues in the range of $273-$283 million, with product revenues expected in the band of $179-$184 million and service revenues in the range of $94-$99 million.
The Zacks Consensus Estimate for the total revenues of the first quarter of 2023 is pegged at $273.86 million.
The adjusted EPS for the first quarter is anticipated in the range of 4-14 cents. The Zacks Consensus Estimate for the same is pegged at 29 cents.
Our Take
Omnicell ended the fourth quarter of 2022 with better-than-expected earnings and revenues. Adjusted earnings for the quarter exceeded OMCL’s revised guidance (projected between 5 and 15 cents) due to increased revenues, the lower cost of sales, solid expense management and lower performance-based compensations. The quarterly revenues also beat the previous guidance range of $285-295 million, which buoys optimism.
The robust market demand for Omnicell’s Advanced Services is also encouraging. The company’s newest launch of Specialty Pharmacy Services is expected to boost its portfolio by providing enhanced clinical and business outcomes for customers across all settings of care.
Meanwhile, mounting operating costs led to an operating loss in the quarter, placing significant pressure on the bottom line. The company has taken several measures to refine its cost structure, including a reduction in workforce and other expense containment efforts.
Zacks Rank and Key Picks
Omnicell currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Avanos Medical (AVNS - Free Report) , LivaNova (LIVN - Free Report) and ShockWave Medical (SWAV - Free Report) .
Avanos Medical, currently carrying a Zacks Rank #2 (Buy), reported a fourth-quarter fiscal 2023 adjusted EPS of 60 cents, beating the Zacks Consensus Estimate by 25%. Revenues of $218 million outpaced the consensus mark by 1.11%. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Avanos Medical has an expected earnings growth rate of 19.75% for a year. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average being 11.01%.
LivaNova, with a Zacks Rank #2, reported a fourth-quarter fiscal 2023 adjusted EPS of $0.81, which beat the Zacks Consensus Estimate by 12.5%. Revenues of $275 million outpaced the consensus mark by 4.12%.
LivaNova has an expected earnings growth rate of 17.83% for a year. LIVN’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the last one, the average being 2.62%.
ShockWave Medical reported fourth-quarter fiscal 2023 adjusted earnings of $3.71 per share, beating the Zacks Consensus Estimate by 274.75%. Revenues of $144 million surpassed the Zacks Consensus Estimate by 1.12%. The company currently has a Zacks Rank #2.
ShockWave has an expected earnings growth rate of 17.14% for a year. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 118.36%.
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Omnicell (OMCL) Q4 Earnings Beat Estimates, Margins Down
Omnicell, Inc. (OMCL - Free Report) reported fourth-quarter 2022 adjusted earnings per share (EPS) of 33 cents, a 64.1% plunge year over year. However, the metric remarkably beat the Zacks Consensus Estimate by 266.7%.
The adjustments include one-time expenses like share-based compensations, the amortization of acquired intangibles, acquisition-related expenses, severance-related expenses and others.
On a GAAP basis, the loss per diluted share was 64 cents in the fourth quarter compared to the EPS of 28 cents in the prior-year quarter.
For the full year, adjusted earnings were $3.0 per share, down 21.3% from the year-ago period. This figure exceeded the Zacks Consensus Estimate by 9.5%.
Revenues in Detail
Revenues for the fourth quarter totaled $297.7 million, down 4.3% year over year. The decline was mainly due to macroeconomic uncertainties, freezes and delays in the capital budget of health systems and ongoing customer labor shortages. The figure beat the Zacks Consensus Estimate by 3.9%.
Total revenues for 2022 were $1.29 billion, up 14.5% from the year-ago period. The reported figure was in line with the Zacks Consensus Estimate.
Segmental Details
On a segmental basis, product revenues declined 11.9% year over year to $196.9 million in the reported quarter.
Service and other revenues climbed 15% year over year to $100.7 million.
Omnicell, Inc. Price, Consensus and EPS Surprise
Omnicell, Inc. price-consensus-eps-surprise-chart | Omnicell, Inc. Quote
Operational Update
In the quarter under review, the adjusted gross profit declined 18.4% to $121.8 million. The adjusted gross margin contracted 710 basis points (bps) to 40.9%.
Operating expenses were $160.1 million in the fourth quarter, up 16.3% year over year. The operating loss in the quarter totaled $38.4 million compared to the operating profit of $11.5 million in the year-ago quarter. The adjusted operating margin in the fourth quarter contracted 1661 bps to 12.9%.
Financial Update
Omnicell exited 2022 with cash and cash equivalents of $330.4 million compared with $349.1 million at the end of 2021.
The cumulative cash flow from operating activities at the end of 2022 was $77.8 million compared with $231.8 million a year ago.
2023 Outlook
Omnicell provided its guidance for the full year 2023 and the first quarter. Total revenues for 2023 are expected in the range of $1.15-$1.19 billion, with product revenues in the band of $740-$760 million and service revenues projected in the band of $410-$430 million. The Zacks Consensus Estimate for total revenues is pegged at $1.20 billion.
The adjusted EPS for the full year is expected in the range of $1.55-$1.80 per share. The Zacks Consensus Estimate for the same is pegged at $1.96.
For the first quarter of 2023, Omnicell expects revenues in the range of $273-$283 million, with product revenues expected in the band of $179-$184 million and service revenues in the range of $94-$99 million.
The Zacks Consensus Estimate for the total revenues of the first quarter of 2023 is pegged at $273.86 million.
The adjusted EPS for the first quarter is anticipated in the range of 4-14 cents. The Zacks Consensus Estimate for the same is pegged at 29 cents.
Our Take
Omnicell ended the fourth quarter of 2022 with better-than-expected earnings and revenues. Adjusted earnings for the quarter exceeded OMCL’s revised guidance (projected between 5 and 15 cents) due to increased revenues, the lower cost of sales, solid expense management and lower performance-based compensations. The quarterly revenues also beat the previous guidance range of $285-295 million, which buoys optimism.
The robust market demand for Omnicell’s Advanced Services is also encouraging. The company’s newest launch of Specialty Pharmacy Services is expected to boost its portfolio by providing enhanced clinical and business outcomes for customers across all settings of care.
Meanwhile, mounting operating costs led to an operating loss in the quarter, placing significant pressure on the bottom line. The company has taken several measures to refine its cost structure, including a reduction in workforce and other expense containment efforts.
Zacks Rank and Key Picks
Omnicell currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Avanos Medical (AVNS - Free Report) , LivaNova (LIVN - Free Report) and ShockWave Medical (SWAV - Free Report) .
Avanos Medical, currently carrying a Zacks Rank #2 (Buy), reported a fourth-quarter fiscal 2023 adjusted EPS of 60 cents, beating the Zacks Consensus Estimate by 25%. Revenues of $218 million outpaced the consensus mark by 1.11%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Avanos Medical has an expected earnings growth rate of 19.75% for a year. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average being 11.01%.
LivaNova, with a Zacks Rank #2, reported a fourth-quarter fiscal 2023 adjusted EPS of $0.81, which beat the Zacks Consensus Estimate by 12.5%. Revenues of $275 million outpaced the consensus mark by 4.12%.
LivaNova has an expected earnings growth rate of 17.83% for a year. LIVN’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the last one, the average being 2.62%.
ShockWave Medical reported fourth-quarter fiscal 2023 adjusted earnings of $3.71 per share, beating the Zacks Consensus Estimate by 274.75%. Revenues of $144 million surpassed the Zacks Consensus Estimate by 1.12%. The company currently has a Zacks Rank #2.
ShockWave has an expected earnings growth rate of 17.14% for a year. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 118.36%.