Omnicell, Inc. OMCL reported first-quarter 2024 adjusted earnings per share (EPS) of 3 cents compared with 39 cents in the year-ago quarter. However, the metric beat the Zacks Consensus Estimate of a loss of 8 cents per share.
Adjustments include one-time expenses like share-based compensations, the amortization of acquired intangibles, acquisition-related expenses, executive transition costs, severance-related expenses and others.
GAAP loss was 34 cents per share in the quarter under review compared with 33 cents in the prior-year quarter.
Revenues in Detail
Revenues in the first quarter totaled $246.2 million, down 15.3% year over year. However, the figure beat the Zacks Consensus Estimate by 4.4%.
Segmental Details
On a segmental basis, Product revenues dropped 28.2% year over year to $133.3 million in the reported quarter. Our model’s projected revenues for this segment were $130.9 million.
Omnicell, Inc. Price, Consensus and EPS Surprise
Omnicell, Inc. price-consensus-eps-surprise-chart | Omnicell, Inc. Quote
Service and other revenues climbed 7.6% year over year to $112.9 million. Our model estimate was $104.1 million.
Operational Update
In the quarter under review, the gross profit declined 25.9% to $92.6 million. The gross margin contracted 539 basis points (bps) to 37.6% despite a 7.3% fall in the cost of revenues.
Operating expenses were $114.5 million in the first quarter, down 22.7% year over year. The operating loss in the quarter totaled $21.9 million compared with $23 million in the prior-year period.
Financial Update
Omnicell exited the first quarter of 2024 with cash and cash equivalents of $512.4 million compared with $468 million at the end of 2023.
The cumulative cash flow provided by operating activities at the end of the first quarter was $50 million compared with $12.8 million in the comparable period last year.
2024 Outlook
Omnicell reaffirmed its financial outlook for the full year 2024.
Total revenues for 2024 are expected in the range of $1.045 billion-$1.120 billion (same as earlier). Of this, product revenues are expected in the range of $605 million-$650 million (unchanged) and service revenues in the band of $440 million-$470 million (unchanged). The Zacks Consensus Estimate for total revenues is pegged at $1.08 billion.
The adjusted EPS for the full year is expected in the range of 90 cents-$1.40 (same as earlier). The Zacks Consensus Estimate is pegged at $1.04.
For the second quarter of 2024, Omnicell expects revenues in the range of $250 million-$260 million, including anticipated product revenues in the band of $140 million-$145 million and service revenues in the range of $110 million-$115 million.
The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $255.4 million.
The adjusted earnings for the second quarter are expected between 10 cents and 20 cents per share. The Zacks Consensus Estimate is pegged at 21 cents.
Our Take
Omnicell delivered better-than-expected earnings and revenues in the first quarter of 2024. The top line benefitted from solid execution and timing within both Technical Services and Advanced Services. Strong cost and operating expense management favored the company in exceeding its estimates for bottom-line results.
In addition, Omnicell advanced its holistic review of the business in an effort to identify areas for operational and financial improvement that could potentially create sustained stockholder value. The outcome of this review is expected to positively impact its performance.
However, both revenues and earnings were lower compared to last year’s comparable figures. A contraction in the gross margin is discouraging too. The company continued to navigate a challenging interest rate environment and budgetary constraints in areas of its customer base.
Zacks Rank and Key Picks
Omnicell currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Medpace MEDP, Owens & Minor OMI and Encompass Health Corporation EHC.
Medpace, sporting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2024 EPS of $3.20, which beat the Zacks Consensus Estimate by 30.6%. Revenues of $511 million improved 17.7% from last year’s comparable figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace has an estimated 2024 earnings growth rate of 26.5% compared with the industry’s 12.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 12.8%.
Owens & Minor, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2024 EPS of 19 cents, which topped the Zacks Consensus Estimate by 11.8%. Revenues of $2.61 billion increased 3.6% year over year.
OMI has an estimated long-term earnings growth rate of 20.5% compared to the industry’s 10.8%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 11.9%.
Encompass Health, carrying a Zacks Rank #2, reported a first-quarter 2024 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 20.4%. Net operating revenues of $1.3 billion topped the Zacks Consensus Estimate by 3.6%.
EHC has an estimated long-term earnings growth rate of 15.6% compared with the industry’s 11.7% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.7%.
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Owens & Minor, Inc. (OMI) : Free Stock Analysis Report
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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.
