) reported fourth-quarter 2013 adjusted earnings per share (EPS)
of 21 cents (considering stock-based compensation as a regular
expense), up 16.7% from the year-ago adjusted figure of 18 cents.
However, the adjusted EPS fell short of the Zacks Consensus
Estimate by a penny.
Following the earnings announcement, the company's share price
dropped 0.29% to $27.12 after the market closed on Feb 7.
For full-year 2013, Omnicell reported adjusted EPS of 77
cents, up 28.3% from the year-ago equivalent of 60 cents.
On a reported basis, Omnicell's net income was $6.8 million
(or 19 cents per share), higher than $5.5 million (or 16 cents
per share) in the year-ago quarter. For 2013, net income was
$23.9 million (or 67 cents per share), up 47.5% from the net
income of 16.2 million (or 47 cents per share) in 2012.
Revenues in Detail
Revenues in the quarter grew 17.3% year over year to $105.8
million, beating the Zacks Consensus Estimate of $101 million.
Growth was led by strong demand from G4 upgrades to existing
automated sensing system installation. As per management, revenue
improvement can also be attributed to strong sales contribution
from the Sidra medical center in Qatar. This was the order which
the company took up in late 2012. For the full year, the company
recorded revenues of $380.6 million, up 21.2% from the previous
year. The reported figure also surpassed the Zacks Consensus
Estimate of $376 million.
The company received record orders in the quarter, of which
47% (for automated dispensing systems) came from new and
competitive conversion customers.
Product revenues, contributing 82.1% of total revenue, rose
20% to $86.9 million, while Services and Others (accounting for
the rest) witnessed an upside of 6.2% to $18.9 million.
Segment-wise, Acute Care business recorded revenues of $79.9
million while Non-Acute Care segment revenues came in at $25.8
Omnicell's cost of product sales were up 25.6% year over year
to $41.2 million while cost of services and other revenues
decreased 0.3% to $7.94 million. Gross profit improved 14.6% to
$56.6 million. However, gross margin contracted about 130 basis
points (bps) to 53.5% in the quarter.
Omnicell's research and development expenses climbed 19.4% to
$7.4 million while selling, general and administrative expenses
rose 14.1% to $38.1 million. Accordingly, operating margin
contracted 40 bps to 10.5% in the quarter.
Omnicell exited the fiscal with cash and cash equivalents of
$104.5 million compared with $62.3 million at the end of
Omnicell provided its business outlook for the first quarter and
full year 2014. For the first quarter, the company expects
revenues of $96−$98 million. The current Zacks Consensus Estimate
of $97 million is at the mid-point of the guidance range. The
company expects its adjusted EPS to be approximately 23 cents.
The Zacks Consensus Estimate of 17 cents falls below the
The company expects revenues for the full year in the range of
$415-$425 million (estimated growth of 9-12%). The current Zacks
Consensus Estimate of $422 million lies near the upper end of the
range. The full year adjusted EPS forecast lies in the band of
$1.17-$1.23. The Zacks Consensus Estimate is pegged at 95 cents,
far below the company's guidance.
At the end of 2014, Omnicell expects product bookings of
Omnicell reported a mixed fourth-quarter 2014 with the top
line beating the Zacks Consensus Estimate but earnings failing to
meet the same. Rising operating costs during the quarter
significantly put pressure on margins. We note that constrained
hospital spending might hamper Omnicell's market penetration in
the U.S. Tough competitive landscape also remains an
However, Omnicell serves a niche industry and stands to gain
from its three-pronged strategy of providing differentiated
products, selective acquisitions and targeted international
expansion. The company's venture into the highly profitable and
underpenetrated non-acute care market with the MTS acquisition is
yielding positive results.
The stock currently carries a Zacks Rank #2 (Buy). On the
other hand, medical sector stocks that warrant a look include
Align Technology Inc.
Cardinal Health, Inc.
). All of these carry a Zacks Rank
ALIGN TECH INC (ALGN): Free Stock Analysis
ANGIODYNAMICS (ANGO): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
OMNICELL INC (OMCL): Free Stock Analysis
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