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Omnicell (OMCL) Earnings & Revenues Beat Estimates in Q3

Omnicell, Inc.OMCL reported adjusted earnings per share (EPS) of 63 cents in third-quarter 2018, beating the Zacks Consensus Estimate of 56 cents.

Earnings improved from the year-ago 46 cents and surpassed the company's guided range of 52-57 cents.

Revenues in Detail

Adjusted revenues in the third quarter increased 9.2% year over year to $204.3 million, surpassing the Zacks Consensus Estimate by 0.4%.

On a segmental basis, Automation and Analytics revenues increased 8.9% year over year in the quarter to $168.3 million.

Omnicell, Inc. Price, Consensus and EPS Surprise

Omnicell, Inc. Price, Consensus and EPS Surprise | Omnicell, Inc. Quote

Moreover, revenues at the Medication Adherence segment rose 12.1% year over year to $36 million.

Operational Update

Omnicell's gross profit in the reported quarter increased 16.6% to $98.9 million. Gross margin expanded 300 basis points (bps) to 48.4%.

SG&A expenses in the third quarter increased 16.7% year over year to $65.6 million. Research and development expenses contracted 3.7% year over year to $15.8 million. Operating expenses were $81.4 million in the third quarter, up 12.1% year over year.

Operating profit in the quarter totaled $17.5 million, up 43.4% from the year-ago quarter. Operating margin in the quarter rose 210 bps to 8.6%.

Financial Update

Omnicell exited third-quarter 2018 with cash and cash equivalents of $44.2 million, compared with $46.2 million at the end of second-quarter 2018.

2018 Guidance

For the fourth quarter of 2018, Omnicell expects adjusted revenues in the band of $211-$217 million. The company expects fourth-quarter 2018 adjusted earnings per share in the band of 64-69 cents. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $215.2 million, within the guided range. Our consensus estimate for the earnings per share of 69 cents, coincides with the high end of the guided range.

For 2018, Omnicell raised the product bookings to the range of $645-$670 million compared with the previous $630-$665 million.

The company raised the low end of the guided range and slashed the high end. It now expects adjusted revenues in the band of $787-$793 million compared with the previously provided range of $780-$800 million. The Zacks Consensus Estimate for full-year revenues stands at $789.9 million, within the company's guided range.

Omnicell raised the low end of the adjusted earnings guidance for 2018. The company now expects adjusted EPS in the range of $2-$2.05 compared with the previous band of $1.90-$2.05. The Zacks Consensus Estimate for full-year earnings is pegged at $2, in line with the low end of the guided range.

Our Take

Omnicell's third-quarter 2018 performance was impressive. The company continued to see solid uptake of Omnicell XT. It also entered various deals for both the XR2 and the IVX Workflow products. A rise in bookings and product backlogs was also observed in the quarter. We are encouraged to note that the company is working on product innovation through R&D. Also, Omnicell is expected to gain from new launches, strategic partnerships and digital transformation.

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 are Amedisys, Inc. AMED , Baxter International Inc BAX andMasimo Corporation MASI .

Amedisys is expected to release third-quarter 2018 results on Oct 29. The Zacks Consensus Estimate for adjusted EPS is 79 cents and for revenues is $410.2 million. The stock carries a Zacks Rank of 1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Baxter is expected to release third-quarter 2018 results on Oct 31. The Zacks Consensus Estimate for EPS is pegged at 74 cents and for revenues at $2.79 billion. The stock has a Zacks Rank #2 (Buy).

Masimo is slated to release third-quarter 2018 results on Oct 31. The Zacks Consensus Estimate for EPS is pinned at 68 cents and for revenues at $206.3 million. The company is a Zacks #2 Ranked player.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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