Omnicell (OMCL) Earnings & Revenues Beat Estimates In Q1

Omnicell, Inc. (NASDAQ:OMCL) reported adjusted earnings per share of 29 cents in first-quarter 2018, beating the Zacks Consensus Estimate of 27 cents.

Earnings improved from the year-ago figure of 7 cents and are above the company’s guided range of 22-28 cents.

Revenues in Detail

Adjusted revenues in the first quarter increased 22.9% year over year to $182.6 million, also above the Zacks Consensus Estimate of $177.4 million.

On a segmental basis, Automation and Analytics revenues increased 23.9% year over year in the first quarter to $151.4 million.

Also, revenues at the Medication Adherence segment rose 18.3% year over year to $31.2 million.

Operational Update

Omnicell's gross profit during the reported quarter increased 32.6% to $82.5 million. Gross margin expanded 330 basis points (bps) to 45.2%.

SG&A expenses in the first quarter increased 5.4% year over year to $65.3 million. Research and development expenses decreased 1.6% year over year to $16.5 million. Operating expenses were $81.8 million in the first quarter, up 3.9% year over year.

Operating profit in the quarter totaled $0.6 million, compared with $16.6 million in the year-ago quarter.

Financial Update

Omnicell exited first-quarter 2018 with cash and cash equivalents of $43.8 million, compared with $32.4 million at the end of fourth-quarter 2017.

2018 Guidance

For the second quarter of 2018, Omnicell expects adjusted revenues in the band of $185-$190 million, which includes the impact of reclassification of selling costs as a reduction of revenues. The company expects second-quarter 2018 adjusted earnings per share in the band of 36-42 cents. The Zacks Consensus Estimate for second-quarter revenues is pegged at $194.7 million and earnings per share at 45 cents. Both the estimates fall above the guided range.

For 2018, Omnicell reaffirmed the product bookings at the range of $625-$660 million. Also, the company expects adjusted revenues in the band of $780-$800 million, which includes the impact of reclassification of selling costs as a reduction of revenues. The company also projects adjusted earnings in the band of $1.85-$2.05 per share.

The Zacks Consensus Estimate for full-year earnings is pegged at $2.00, within the company’s guided range. The Zacks Consensus Estimate for full-year revenues stands at $789.4 million, within the company’s guided range.

Our Take

Omnicell’s first-quarter 2018 performance was impressive. Further, both the company’s segments witnessed year-over-year growth. We are encouraged to note that the company is working on product innovation through R&D. Also, Omnicell is expected to gain from recent launches and strategic partnerships.

However, a tough competitive landscape acts as a dampener.

Zacks Rank & Key Picks

Omnicell has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space, which reported solid earnings this season, are Laboratory Corporation of America Holdings (NYSE:LH) , Chemed Corporation (NYSE:CHE) and Intuitive Surgical, Inc. (NASDAQ:ISRG) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), LabCorp and Chemed carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical reported first-quarter 2018 EPS of $2.44 per share, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the Zacks Consensus Estimate by 10.6%.

LabCorp reported first-quarter 2018 EPS of $2.78, beating the Zacks Consensus Estimate by 5.3%. Revenues came in at $2.85 billion, steering past the Zacks Consensus Estimate of $2.78 billion.

Chemed posted first-quarter 2018 EPS of $2.72, beating the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, surpassing the Zacks Consensus Estimate of $420 million.

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