Benchmark Gives Earnings Preview On OSI Systems Ahead Of Next's Weeks Earnings

OSI Systems OSIS is scheduled to report its Q3FY11 results Tuesday, April 26. Benchmark expects OSI to report an in-line or better than expected quarter from strength in security and recovery in healthcare. Consensus estimates are $168 million in sales and $0.47 in EPS. The company's backlog is $293 million, and announced security bookings were $70 million, up 26% y/y. Per Benchmark's upgrade in March, it believes OSI has upside in FY12 from the launch of its new fee per scan cargo screening project in Puerto Rico, and security visibility has strengthened with key awards from Customs and Border Protection and for the London Olympics. The company announced last Thursday that its container screening program in Puerto Rico is fully operational. The stock is down almost 15% over the last week on no news and is currently trading at 7.7x our FY12 EV/EBITDA. Benchmark believes recent weakness represents a buying opportunity ahead of a solid quarter and improving prospects in both security and healthcare. Benchmark has a $44 PT and Buy rating on OSIS OSIS closed Tuesday at $34.25