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Omnicell (OMCL) Q2 Earnings Top Estimates, Margins Down
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Omnicell, Inc. (OMCL - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 51 cents, which declined 10.5% year over year. However, the metric beat the Zacks Consensus Estimate of 16 cents by a stupendous 218%.
Adjustments include one-time expenses like share-based compensations, the amortization of acquired intangibles, acquisition-related expenses, RDS restructuring and others.
GAAP EPS was 8 cents, flat year over year.
Revenues in Detail
Revenues totaled $276.8 million, down 7.4% year over year. However, the figure beat the Zacks Consensus Estimate by 9.9%.
Segmental Details
On a segmental basis, Product revenues declined 16.9% year over year to $156.6 million in the reported quarter. Our model’s projected revenues for this segment totaled $141.3 million.
Service and other revenues climbed 8.8% year over year to $120.2 million. Our model estimate was $110.4 million.
Operational Update
In the quarter under review, the gross profit declined 14.9% to $114.4 million. The gross margin contracted 365 basis points (bps) to 41.3% despite a 1.3% decline in the cost of revenues.
Operating expenses amounted to $111.1 million, down 12.3% year over year. The operating profit in the quarter totaled $3.2 million, down 58.4% year over year. The operating margin contracted 143 basis points to 1.2%.
Financial Update
Omnicell exited the second quarter of 2024 with cash and cash equivalents of $556.8 million compared with $512.4 million at the end of the first quarter of 2024.
The cumulative cash flow provided by operating activities at the end of the second quarter was $108.7 million compared with $85.7 million in the comparable period of 2023.
Updated 2024 Outlook
Omnicell updated its financial outlook for full-year 2024.
Total revenues are expected to be in the range of $1.07-$1.11 billion (narrowed from the previous guidance of $1.05-$1.12 billion). Of this, product revenues are expected to be in the range of $610-$630 million (previously $605-$650 million) and service revenues are anticipated to be in the band of $460-$480 million (previously $440-$470 million). The Zacks Consensus Estimate for total revenues is pegged at $1.07 billion.
The adjusted EPS for the full year is expected to be in the range of $1.20-$1.50 (up from the previous guidance of 90 cents-$1.40). The Zacks Consensus Estimate is pegged at $1.08.
For the third quarter of 2024, Omnicell expects revenues to be in the range of $275-$285 million, including anticipated product revenues in the band of $159-$164 million and service revenues in the range of $116-$121 million.
The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $278.9 million.
The adjusted EPS for the third quarter is expected to be between 34 cents and 44 cents. The Zacks Consensus Estimate is pegged at 40 cents.
Our Take
Omnicell delivered better-than-expected results, with both its earnings and revenues surpassing their respective estimates. The top line benefited from solid execution and timing within both Technical Services and Advanced Services. Strong cost and operating expense management favored the company in exceeding its bottom-line estimates.
The updated 2024 EPS guidance instills optimism among investors.
On the flip side, second-quarter earnings and revenues were lower than the prior-year figures, reflecting the adverse impacts of a continued challenging environment for some of the health system customers and the timing of the XT Series automated dispensing systems lifecycle. A contraction in the margins is also discouraging.
Zacks Rank and Key Picks
Omnicell currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has a long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
Abbott, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2024 earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2 at present, reported a second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX has a historical five-year earnings growth rate of 7.4% compared with the industry’s 4.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.31%.
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Omnicell (OMCL) Q2 Earnings Top Estimates, Margins Down
Omnicell, Inc. (OMCL - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 51 cents, which declined 10.5% year over year. However, the metric beat the Zacks Consensus Estimate of 16 cents by a stupendous 218%.
Adjustments include one-time expenses like share-based compensations, the amortization of acquired intangibles, acquisition-related expenses, RDS restructuring and others.
GAAP EPS was 8 cents, flat year over year.
Revenues in Detail
Revenues totaled $276.8 million, down 7.4% year over year. However, the figure beat the Zacks Consensus Estimate by 9.9%.
Segmental Details
On a segmental basis, Product revenues declined 16.9% year over year to $156.6 million in the reported quarter. Our model’s projected revenues for this segment totaled $141.3 million.
Service and other revenues climbed 8.8% year over year to $120.2 million. Our model estimate was $110.4 million.
Operational Update
In the quarter under review, the gross profit declined 14.9% to $114.4 million. The gross margin contracted 365 basis points (bps) to 41.3% despite a 1.3% decline in the cost of revenues.
Operating expenses amounted to $111.1 million, down 12.3% year over year. The operating profit in the quarter totaled $3.2 million, down 58.4% year over year. The operating margin contracted 143 basis points to 1.2%.
Financial Update
Omnicell exited the second quarter of 2024 with cash and cash equivalents of $556.8 million compared with $512.4 million at the end of the first quarter of 2024.
The cumulative cash flow provided by operating activities at the end of the second quarter was $108.7 million compared with $85.7 million in the comparable period of 2023.
Updated 2024 Outlook
Omnicell updated its financial outlook for full-year 2024.
Total revenues are expected to be in the range of $1.07-$1.11 billion (narrowed from the previous guidance of $1.05-$1.12 billion). Of this, product revenues are expected to be in the range of $610-$630 million (previously $605-$650 million) and service revenues are anticipated to be in the band of $460-$480 million (previously $440-$470 million). The Zacks Consensus Estimate for total revenues is pegged at $1.07 billion.
The adjusted EPS for the full year is expected to be in the range of $1.20-$1.50 (up from the previous guidance of 90 cents-$1.40). The Zacks Consensus Estimate is pegged at $1.08.
Omnicell, Inc. Price, Consensus and EPS Surprise
Omnicell, Inc. price-consensus-eps-surprise-chart | Omnicell, Inc. Quote
For the third quarter of 2024, Omnicell expects revenues to be in the range of $275-$285 million, including anticipated product revenues in the band of $159-$164 million and service revenues in the range of $116-$121 million.
The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $278.9 million.
The adjusted EPS for the third quarter is expected to be between 34 cents and 44 cents. The Zacks Consensus Estimate is pegged at 40 cents.
Our Take
Omnicell delivered better-than-expected results, with both its earnings and revenues surpassing their respective estimates. The top line benefited from solid execution and timing within both Technical Services and Advanced Services. Strong cost and operating expense management favored the company in exceeding its bottom-line estimates.
The updated 2024 EPS guidance instills optimism among investors.
On the flip side, second-quarter earnings and revenues were lower than the prior-year figures, reflecting the adverse impacts of a continued challenging environment for some of the health system customers and the timing of the XT Series automated dispensing systems lifecycle. A contraction in the margins is also discouraging.
Zacks Rank and Key Picks
Omnicell currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has a long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
Abbott, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2024 earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2 at present, reported a second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX has a historical five-year earnings growth rate of 7.4% compared with the industry’s 4.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.31%.