Shares of OSI Systems Inc. rose nearly 10 percent on Wednesday after the company reported lower-than-expected fiscal third-quarter earnings but a larger stock buyback.
The Hawthorne maker of medical diagnostic equipment and security scanners reported third-quarter net income of $13.5 million (66 cents a share), a 7 percent increase from the same period a year earlier. Revenue fell 5 percent to $198 million.
Adjusted net income was $15.2 million (74 cents). Analysts surveyed by Thomson Reuters on average expected the company to report 74 cents on revenue of $206 million.
Chief Executive Deepak Chopra noted that the company achieved record earnings due to significant expansion of its operating margin, led by its 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 health care division, our growth outlook for fiscal 2014 and beyond remains strong,” Chopra said in a statement.
OSI’s board authorized the purchase of up to 1 million additional shares under the company’s stock repurchase program for a total of 4 million shares.
Shares closed up $5.22, or 9.8 percent to $58.70 on the Nasdaq.