OSI Systems Inc. reported second-quarter revenue that missed analysts’ estimates as sales by its healthcare business shrunk on weakened demand for medical scanners in Europe.
The Hawthorne company said Thursday that sales rose 3 percent to $194 million, compared with average analyst estimates of $211 million, according to data compiled by Bloomberg. Net income for the third quarter rose about 1 percent to $12.4 million, or 60 cents per share. The company’s stock fell nearly 20 percent to $57.33 at the close of trading Thursday.
Revenue for the company’s security business increased about 3 percent to $92 million. Revenue from its healthcare group declined 5 percent to $56 million after several quarters of double-digit growth.
“Much of the dip was the result of the non-U.S. economic environment, especially Europe,” Deepak Chopra, chief executive, said in a conference call with analysts. “With the election cycles behind us in the United States and the continued progress in the stabilization of Europe, we expect a return to growth in the health care industry and are projecting the second half to be stronger than last year.”
The Transportation Security Administration ended a $5 million contract for full-body scanners in airports. The TSA and OSI agreed to pull all full-body scanners made by the company’s Rapiscan group. The company could not meet a deadline for software that would make the passenger’s silhouettes less revealing.
OSI said fiscal 2013 full-year revenue will be $850 million to $875 million.