OSIS - OSI Systems stock dips as annual earnings outlook falls short

OSI Systems ( NASDAQ: OSIS ) shares dropped ~5% on Friday after the electronic components maker issued a fiscal year 2023 earnings outlook that fell short of estimates.

The company expects revenues in the range of $1.24B to $1.275B and adjusted earnings per diluted share in the range of $6.02 to $6.25 for the year, compared to Bloomberg estimates for $1.26B in revenue and $6.28 in adj. EPS.

The earnings guidance reflects an impact of ~$0.30 per diluted share of expected increases in interest expense and contemplates increased costs associated with certain products already in backlog. OSI Systems ( OSIS ) also expects its borrowing cost to nearly double in fiscal '23 at the current level of debt outstanding.

For fourth quarter ended June 30, the company reported record revenue of $337M (+1% Y/Y) and adj. EPS of $1.96 (+27% Y/Y). The top-line results were driven by record sales in the security division. The strength in security sales was partially offset by a slight reduction in year-over-year Opto sales, mainly due to certain supply chain constraints and a small reduction in health care division sales.

Backlog stood at $1.2B at quarter-end (15% increase from June 30, 2021).

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