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Omnicell (OMCL) Lags Q4 Earnings Estimates, Beats on Revenues

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Omnicell, Inc. (OMCL - Free Report) announced fourth-quarter 2019 results, wherein adjusted earnings per share (EPS) were 77 cents, up 10% year over year. However, the metric missed the Zacks Consensus Estimate by a penny.

On a GAAP (reported) basis, EPS was 51 cents for the quarter under review, reflecting an increase of 41.7% from the year-ago period.

Full-year adjusted EPS came in at $2.81, reflecting a 34.4% increase from the year-ago period. This time too, the company lagged the Zacks Consensus Estimate of $2.82.

Omnicell, Inc. Price, Consensus and EPS Surprise

Omnicell, Inc. Price, Consensus and EPS Surprise

Omnicell, Inc. price-consensus-eps-surprise-chart | Omnicell, Inc. Quote


Revenues in Detail

Fourth-quarter revenues increased 17.3% year over year to $248.3 million. The figure surpassed the Zacks Consensus Estimate by 2.2%.

Full-year revenues came in at $897 million, reflecting a 13.9% increase from the year-ago period. Revenues beat the Zacks Consensus Estimate by 0.6%.

Segmental Details

On a segmental basis, Product revenues improved 21% year over year to $187.1 million in the reported quarter.

Service and other revenues climbed 7% year over year to $61.2 million.

Operational Update

In the quarter under review, Omnicell's adjusted gross profit rose 19.1% to $127.1 million. Further, adjusted gross margin expanded 80 basis points (bps) to 51.2%.

However, adjusted operating expenses were $90.5 million in the fourth quarter, up 24.9% year over year. Adjusted operating profit totaled $36.6 million, reflecting a 6.5% increase from the prior-year quarter. However, adjusted operating margin in the fourth quarter dipped 9 bps to 14.7%.

Financial Update

Omnicell exited the year with cash and cash equivalents of $127.2 million compared with $67.2 million at the end of 2018.

At the end of 2019, cash flow from operating activities was $145 million compared with $103.9 million at the end of 2018.

Guidance

For the first quarter of 2020, Omnicell expects adjusted revenues between $221 million and $227 million. The Zacks Consensus Estimate for the metric is pegged at $224 million.

On an adjusted basis, product revenues are forecasted between $163 million and $168 million while service revenues are projected within $58-$59 million for the quarter.

Fourth-quarter adjusted EPS is envisioned in the band of 52-57 cents. The Zacks Consensus Estimate for the same is pegged at 56 cents.

For the year, the company expects adjusted revenues between $1 billion and $1.02 billion. The Zacks Consensus Estimate for the metric is pegged at $986.1 million.

For 2020, the anticipated ranges for product and service revenues are $752-$768 million and $248-$252 million, respectively.

Adjusted EPS is expected between $2.96 and $3.16 for 2020. The Zacks Consensus Estimate for the metric stands at $3.04.

Our Take

Omnicell exited 2019 with mixed fourth-quarter results. While revenues beat the consensus mark, earnings lagged the same. The top line registered strong year-over-year growth and the company continued to see solid segmental contributions. Expansion of gross margin in the reported quarter is encouraging as well.

Currently, the company is working on product innovation through R&D. Omnicell is expected to gain traction from product launches, strategic partnerships and digital transformation.

However, a contraction in adjusted operating margin and a tough competitive landscape are concerning.

Zacks Rank and Key Picks

Omnicell currently carries a Zacks Rank #3 (Hold).

Some stocks which reported solid results this earning season are Stryker Corporation (SYK - Free Report) , Accuray Incorporated (ARAY - Free Report) and ResMed Inc. (RMD - Free Report) .

Stryker delivered fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Fourth-quarter revenues of $4.13 billion surpassed the Zacks Consensus Estimate by 0.7%. The company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Accuray reported second-quarter fiscal 2020 adjusted earnings per share (EPS) of a penny, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the Zacks Consensus Estimate by 0.3%. The company sports a Zacks Rank #1.

ResMed, with a Zacks Rank #1, reported second-quarter fiscal 2020 adjusted EPS of $1.21, surpassing the Zacks Consensus Estimate by 19.8%. Its revenues of $736.2 million outpaced the consensus mark by 1.5%.

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