OSI Systems Earnings: Here’s Why Shares are Down Now

OSI Systems, Inc. (NASDAQ:OSIS) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1.59%.

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OSI Systems, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 13.85% to $0.74 in the quarter versus EPS of $0.65 in the year-earlier quarter.

Revenue: Decreased 4.82% to $198.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: OSI Systems, Inc. reported adjusted EPS income of $0.74 per share. By that measure, the company missed the mean analyst estimate of $0.74. It missed the average revenue estimate of $206.37 million.

Quoting Management: Deepak Chopra, OSI Systems’ Chairman and CEO, stated, “We are pleased to announce the results of our third quarter operations. We achieved record earnings for the 12th consecutive quarter as a result of significant operating margin expansion, led by our Security division. Although we experienced lower sales in the quarter due to a difficult prior-year comparison in our Security division and lower than expected results in our Healthcare division, our growth outlook for fiscal 2014 and beyond remains strong with a very robust opportunity pipeline and new product introductions in both divisions. With our Mexico turnkey program ramping up nicely and the majority of our capital investment behind us, we expect to generate significant free cash flow over the next twelve months.”

Key Stats (on next page)…

Revenue increased 2.24% from $194.05 million in the previous quarter. EPS increased 5.71% from $0.70 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $1.1 and has not changed. For the current year, the average estimate has moved up from a profit of $2.84 to a profit of $2.85 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)