OSI Systems (OSIS) falls after Q1 beat as healthcare softness, contract timing weigh on outlook

OSI Systems (OSIS) reported fiscal first-quarter revenue above Wall Street expectations, driven by growth in its Security and Optoelectronics divisions, but shares fell to $231.01 from $282.87 before the earnings release. Management cited higher service revenue, international demand and new contract wins in RF and Homeland Defense. CEO Ajay Mehra said delays tied to a U.S. government shutdown and Middle East conflicts reflected timing issues rather than weaker demand. The Healthcare division posted softer sales due to U.S. order timing, pressuring profitability. Investors are watching backlog conversion, recurring service revenue growth, new U.S. and international security awards, supply-chain risks and momentum in Optoelectronics and Healthcare.