Omnicell, Inc. OMCL reported third-quarter 2024 adjusted earnings per share (EPS) of 56 cents, which declined 9.7% year over year. However, the metric beat the Zacks Consensus Estimate by 36.6%.
Adjustments include one-time expenses like share-based compensations, the amortization of acquired intangibles, acquisition-related expenses and RDS restructuring.
GAAP EPS was 19 cents, up 58.3% from the 2023 figure.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Following the announcement, OMCL shares jumped 32.2% yesterday, finishing the session at $53.05.
Omnicell’s Q3 Revenues
Revenues totaled $282.4 million, down 5.4% year over year. However, the figure beat the Zacks Consensus Estimate by 1.6%.
Segmental Analysis of Q3 Revenues
On a segmental basis, Product revenues declined 16.1% year over year to $158.4 million in the reported quarter. Our model’s projected revenues for this segment were $159.4 million.
Omnicell, Inc. Price, Consensus and EPS Surprise
Omnicell, Inc. Price, Consensus and EPS Surprise
Omnicell, Inc. price-consensus-eps-surprise-chart | Omnicell, Inc. Quote
Service and other revenues climbed 12.9% year over year to $124.1 million. Our model estimate was $117.7 million.
Margin Performance
In the quarter under review, the gross profit declined 7.4% year over year to $122.3 million. The gross margin contracted 89 basis points (bps) to 43.4% despite a 4% decline in the cost of revenues.
Operating expenses amounted to $115.7 million, down 9.8% year over year. The operating profit in the quarter totaled $6.6 million, down 76.8% year over year. The operating margin expanded 108 basis points to 2.3%.
Omnicell exited the third quarter of 2024 with cash and cash equivalents of $570.6 million compared with $556.8 million at the end of the second quarter of 2024.
The cumulative cash flow provided by operating activities at the end of the third quarter was $131.4 million compared with $142.7 million in the year-ago period.
OMCL’s Updated 2024 Outlook
Omnicell updated its financial outlook for 2024.
Total revenues are expected to be $1.10-$1.11 billion (versus the previously mentioned $1.07-$1.11 billion). Of this, product revenues are expected to be $625-$630 million (previously $610-$630 million) and service revenues are anticipated to be $475-$480 million (previously $460-$480 million). The Zacks Consensus Estimate for total revenues is pegged at $1.08 billion.
The adjusted EPS for the year is expected to be $1.65-$1.72 (up from the previously stated $1.20-$1.50). The Zacks Consensus Estimate is pegged at $1.40.
For the fourth quarter of 2024, Omnicell expects revenues of $295-$305 million, including product revenues of $177-$182 million and service revenues of $118-$123 million. The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $278.1 million.
The adjusted EPS for the fourth quarter is expected between 55 cents and 62 cents. The Zacks Consensus Estimate is pegged at 41 cents.
Our Take on OMCL
Omnicell delivered earnings and revenue beat in the third quarter of 2024. The company demonstrated consistent financial strength, with results within or surpassing its guidance. The expansion of the operating margin is highly encouraging. The revised 2024 EPS guidance also brings optimism. As the macroeconomic environment within the healthcare sector shows signs of stabilization, Omnicell’s outcome-centric innovation and customer-first focus are resonating with the market.
In the quarter, the company announced the Central Med Automation Service to streamline medication dispensing throughout the entire health system enterprise by integrating robotics, smart devices and intelligent software with expert services. Omnicell’s multi-year XT Amplify innovation program is also gaining market momentum, with several new customers choosing these offerings to maximize value across their health systems. Beside these, advanced Services delivered another quarter of a solid performance.
On the flip side, revenues were down year over year, reflecting the impacts of a continued challenging environment for some of Omnicell’s health system customers and the timing of the XT Series automated dispensing systems lifecycle.
Zacks Rank & Other Key Picks
Omnicell currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the broader medical space are Quest Diagnostics DGX, Intuitive Surgical ISRG and Boston Scientific Corporation BSX.
Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DGX’s 2024 earnings are expected to rise 2.1%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.3%.
Intuitive Surgical, carrying a Zacks Rank #2, posted a third-quarter 2024 EPS of $1.84, topping the Zacks Consensus Estimate by 11.5%. Revenues of $2.04 billion surpassed the Zacks Consensus Estimate by 1.2%.
ISRG has an estimated 2024 earnings growth rate of 20.1% compared with the industry’s 13.8%. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 10.9%.
Boston Scientific, currently carrying a Zacks Rank #2, reported third-quarter 2024 adjusted earnings of 63 cents per share, which surpassed the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion topped the Zacks Consensus Estimate by 4.5%.
BSX has an estimated 2024 earnings growth rate of 17.6% compared with the industry’s 11.5% rise. The company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 7.2%.
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