Why Omnicell Shares Popped
Oct 26th 2012 6:24PM
Updated Oct 26th 2012 6:32PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Omnicell (NAS: OMCL) , which provides automated systems to help hospitals manage their medication supply, jumped as much as 12%, after reporting record third-quarter earnings results.
So what: For the quarter, thanks to its acquisition of MTS Technologies in May, and strong demand for its product, Omnicell was able to report an adjusted profit of $0.29 on a 12% rise in revenue, to $84.3 million -- both records. EPS absolutely crushed the $0.04 profit that Omnicell reported last year, and handily surpassed the $0.24 that analysts had been expecting. Revenue, however, did fall $3.3 million short of the Street's projections.
Now what: Omnicell has been making all the right moves lately: purchasing MTS, focusing on growing its international business, and strengthening its domestic business, as is evidenced by its partnership with Cerner (NAS: CERN) regarding CareAware iBus. The Affordable Care Act will play right into Omnicell's hands, as greater numbers of patients being covered should lead to an increase in medication prescriptions and, thus, Omnicell's medication management solutions. Over the long-term, and even after today's pop, I can see Omnicell being a smart play.
Craving more input? Start by adding Omnicell to your free and personalized Watchlist so you can keep up on the latest news with the company.
The article Why Omnicell Shares Popped originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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