), a provider of drugs to long-term care facilities and nursing
homes, reported second quarter 2012 adjusted (excluding one-time
expenses) earnings per share of 83 cents, beating the Zacks
Consensus Estimate of 79 cents.
Reported net income in the quarter came in at $18.7 million (or
17 cents per share) compared with a net loss of $1.4 million (or 1
cent per share) in the year-ago quarter.
Sales declined 1.3% year over year to $1,536.0 million in the
second quarter, missing the Zacks Consensus Estimate of $1,564
Net sales of the Long Term Care Group were $1,202.8 million in
the second quarter, down 6.7% year over year.
Net sales of the Specialty Care Group were $330.1 million, up
25.7% year over year.
Gross profit was $367.3 million in the second quarter, up 9.2%
year over year. Adjusted EBITDA from continuing operations stood at
$170.3 million, up 16.4% year over year.
Balance Sheet, Cash Flow and Other
Omnicare ended the second quarter with cash and cash equivalents
of $564.5 million, up 7.7% year over year. Long-term debt
(including notes and convertible debentures) was sizeable at $2.0
billion, up 3.5% year over year.
Cash flow from continuing operations in the quarter was $120.2,
down 12.2% year over year.
Omnicare repurchased about 1.8 million shares in the second
quarter for $58 million. The company had $179 million available
under its recent share repurchase authorization, as of June 30,
For 2012, Omnicare continues to anticipate revenues between $6.1
billion and $6.2 billion. However, the company has upward revised
its expected adjusted earnings per share (from continuing
operations) in a range of $3.22 to $3.28 compared with $3.10 to
$3.20 earlier. Omnicare also increased its forecast for cash flows
(from continuing operations) to the range of $425 million to $525
million compared to the earlier range of $400 million to $500
Omnicare is a market leader in providing pharmaceutical care for
the elderly. The industry is essential for the needs of the
long-term care population. It competes with
National Healthcare Corp
) in certain niche
The company has cut down costs and increased efficiency through
its Full Potential Plan. However, the beneficial effects are partly
offset by pressure from reimbursement cuts.
Over the long term, Omnicare will be able to offset some of
these reimbursement cuts through better purchase. Generics coming
to market in the next few quarters present a major opportunity for
profit due to Omnicare's greater exposure to the institutional
pharmacy channel than in past years.
The stock currently retains a Zacks #2 Rank, which translates
into a short-term Buy rating.
NATL HEALTHCARE (NHC): Free Stock Analysis
OMNICARE INC (OCR): Free Stock Analysis Report
PHARMERICA CORP (PMC): Free Stock Analysis
To read this article on Zacks.com click here.