OSI Systems, Inc. (OSIS) Misses Earnings – Stock Falls Over 30%


OSI Systems, Inc. (NASDAQ:OSIS) shares are trading down big this morning after the company reported a rather large earnings miss. The company reported revenue numbers of $197 million for the second quarter of fiscal 2016, which represented a 23% decrease year-over-year. Net income came in at just $100,000 which is equal to just $0.01 per share. This is much lower than the $18.2 million ($0.89 per share) that they reported for the second quarter of 2015.

“We entered fiscal 2016 with expectations of a challenging first half followed by a stronger second half. Though this is turning out to be true, the challenges associated with the global economy proved to be greater than anticipated leading to disappointing first half financial results. Despite this, we are encouraged by our strong first half bookings, which we believe positions us to rebound nicely in the second half of fiscal 2016,” said Deepak Chopra, OSI Systems’ Chairman and CEO.

For the six month period which ended on December 31, 2015, OSI Systems, Inc. (NASDAQ:OSIS) reported $397 million in revenue which is a 17% decrease year-over-year.

“As expected, our Optoelectronics and Manufacturing division sales decreased year over year,” Chopra explained. “However, operational improvements, together with a more favorable product mix and a migration to more profitable customers, resulted in a 9.4% operating margin, excluding the impact of impairment, restructuring and other charges. This represented our fifth consecutive quarter of year-over-year operating margin expansion.”

The stock is down 31.59% or $24.08 following the news, hitting $52.17 per share. Approximately 40,953 shares traded hands. OSIS shares have risen 2.79% since June 23, 2015 and are currently uptrending. It has outperformed the S&P500 by 13.81%.

From a total of 6 analysts covering OSI Systems (NASDAQ:OSIS) stock, 5 rate it a “Buy”, 1 a “Sell”, and 0 a “Hold”. This means that 83% of the ratings are positive. The highest target price is $103 while the lowest target price is $92. The mean of all analyst targets is $98.75 which is 89.29% above today’s ($52.17) stock price. OSI Systems was the topic of 9 analyst reports since August 25, 2015 according to the firm StockzIntelligence Inc. BB&T Capital initiated shares on November 18 with a “Buy” rating. TH Capital maintained OSIS stock in a recent report from October 30 with a “Buy” rating. Finally, Sidoti initiated the stock with a “Buy” rating in a report they issued on a September 16.

The institutional sentiment decreased to 1 in Q2 2015. It’s down 0.13, from 1.13 in 2015Q2. The ratio dropped, as 18 funds sold all their OSI Systems, Inc. shares they owned while 65 reduced their positions. 23 funds bought stakes while 60 increased their total positions. Institutions now own 16.85 million shares which is 9.05% less than the previous share count of 18.53 million in 2015Q2.

Neumeier Poma Investment Counsel Llc holds 3.97% of its total portfolio in OSI Systems, Inc., equating to 272,815 shares. Mitchell Capital Management Co owns 111,973 shares representing 3.01% of their total US portfolio. Moreover, Tremblant Capital Group has 1.96% of their total portfolio invested in the company, equating to 395,625 shares. The Georgia-based Zwj Investment Counsel Inc has a total of 1.48% of their portfolio invested in the stock. Elk Creek Partners Llc, a Colorado-based fund reported 172,900 shares owned.

Since March 17, 2015, the stock had 0 buys, and 6 sales for a total of $12.14 million in net activity. Good Steven C sold 2,500 shares worth $195,350. Mehra Ajay sold 33,279 shares worth $2.60 million. Ong Chee Cheong Nicholas sold 38,536 shares worth $3.01 million. Morben Paul Keith sold 2,956 shares worth $233,042. The insider Chopra Deepak sold 60,000 shares worth $4.64M.

OSI Systems, Inc. is a vertically integrated designer and maker of specialized electronic systems and components for critical applications. The company has a market cap of $1.03 billion. The Firm sells its products and provides related services in diversified markets, including homeland security, healthcare, defense and aerospace. It has 16.56 P/E ratio. The Firm has three operating divisions: Security, Healthcare, and Optoelectronics and Manufacturing.