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QuidelOrtho (QDEL) Q1 Earnings Beat Estimates, Margins Fall
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QuidelOrthoCorporation (QDEL - Free Report) delivered adjusted earnings per share (EPS) of 44 cents in the first quarter of 2024, down by 75.6% year over year. However, the figure beat the Zacks Consensus Estimate by 1 cent.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
GAAP loss per share for the quarter was $25.50 against the year-ago quarter EPS of 73 cents.
Revenues in Detail
QuidelOrtho registered revenues of $711 million in the first quarter, which decreased 16% year over year on a reported basis and 15.5% at constant exchange rate (CER). The figure beat the Zacks Consensus Estimate by 1.96%.
In the first quarter, QuidelOrtho’s total revenues, excluding COVID-19-related revenues, were $660.8 million (up 4.9% on a reported basis and 5.9% at CER).
In the first quarter, Respiratory revenues were $137.3 million (down 48.3%, both on a reported basis and at CER). Excluding government COVID-19 orders, respiratory revenues grew 6% both on a reported basis and CER.
Non-Respiratory revenues were $573.7 million (down 1.2% on a reported basis and 0.2% at CER). Excluding the one-time third-party collaboration settlement in the first quarter of 2023, non-respiratory revenue grew 3% on a reported basis and 4% in CER.
Segments in Detail
QuidelOrtho now derives revenues from four business units — Labs, Transfusion Medicine (TM), Point-Of-Care (POC) and Molecular Diagnostics (MDx).
In the first quarter, Labs revenues were $356.9 million, down 3.7% and 2.9% on a reported basis and at CER, respectively. Labs revenues grew approximately 4% year over year, excluding the one-time third-party collaboration settlement in the prior-year period.
TM revenues were $160.3 million in the first quarter, up 2.8% and 4.1% on a reported basis and at CER, respectively. The growth was driven by the company’s immunohematology reagent group across regions in the ORTHO VISION Swift and ORTHO VISION Max Swift instrument placements.
POC revenues amounted to $186.6 million in the first quarter, reflecting a decline of 39.4% and 39.3% on a reported basis and at CER, respectively. Excluding COVID-19 revenues, POC business grew approximately 38% year over year.
MDx revenues totaled $7.2 million in the first quarter, down 36.8% on a reported basis and 36.7% at CER. Excluding COVID-19 revenues, MDx business grew approximately 15% year over year.
Geographical Distribution
Geographically, QuidelOrtho derives revenues from North America, Europe, the Middle East and Africa (EMEA), China and Other regions (which includes Latin America, Japan and other Asia-Pacific markets).
Revenues from North America amounted to $433.9 million, reflecting a decline of 25.5% and 25.3% on a reported basis and at CER, respectively.
EMEA revenues amounted to $84.8 million, reflecting an uptick of 4.3% and 3.8% on a reported basis and at CER, respectively.
Revenues from China amounted to $76.1 million, reflecting an improvement of 7.8% on a reported basis and 12.1% at CER.
Revenues from Other regions amounted to $116.2 million, reflecting an uptick of 4.3% on a reported basis and 5.9% at CER.
Margin Trend
In the quarter under review, QuidelOrtho’s adjusted gross profit declined 25.8% to $337.9 million. The adjusted gross margin contracted 630 basis points (bps) to 47.5%.
Selling, marketing and administrative expenses increased 1.1% to $204.7 million. Research and development expenses declined 4.9% year over year to $59.2 million. Adjusted operating expenses were approximately flat year over year.
Adjusted operating income totaled $79.1 million, reflecting a 59% decline from the prior-year quarter’s level. Adjusted operating margin in the first quarter contracted 1170 bps to 11.1%.
Financial Position
QuidelOrtho exited first-quarter 2024 with cash and cash equivalents of $78.5 million compared with $118.9 million at the end of the fourth quarter. Total debt (including short-term debt) at the end of first-quarter 2024 was $2.40 billion compared with $2.41 billion at the fourth-quarter end.
Net cash used in operating activities at the end of first-quarter 2024 was $0.7 million against net cash provided of $188.9 million a year ago.
2024 Guidance Update
Per management, QuidelOrtho has suspended its 2024 financial guidance while it assesses the business under its new president and chief executive officer. The company intends to resume providing guidance later in the year.
Our Take
QuidelOrtho’s earnings and revenues beat the Zacks Consensus Estimate in the first quarter of 2024. Excluding COVID-19 revenue impact, the company witnessed growth in total revenues. Excluding the one-time third-party collaboration settlement in the year-ago period, the company registered revenue growth in its Labs segment. Growth in China and Other regions, excluding COVID-19 revenues, was encouraging. QuidelOrtho also recorded strong revenue growth in the EMEA region, which buoys optimism.
The continued uptick in Sofia instruments and growth in QuidelOrtho’s integrated installed base and automation were encouraging.
In April 2024, QuidelOrtho announced the addition of the ARK Fentanyl II Assay to its U.S. Vitros XT 7600 and 5600 Integrated Systems as well as its Vitros 4600 Chemistry System menu of assays as a MicroTip Partnership Assay. This addition is likely to significantly boost QuidelOrtho’s Labs business unit across the United States.
QuidelOrtho also announced the FDA 510(k) clearance for its QuickVue COVID-19 test. With CLIA certificates of waiver, this approval permits the test to be used accurately and conveniently in home and medical healthcare settings.
In March 2024, the company announced the receipt of Health Canada’s approval for its Triage PLGF (placental growth factor) test for laboratory use in Canada.
However, including the COVID-19 revenue impact, the company witnessed revenue decline in all the segments year over year except for TM. The revenue decline in the North American region was discouraging as well.
QuidelOrtho Corporation Price, Consensus and EPS Surprise
QuidelOrtho currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. (ALGN - Free Report) , Ecolab (ECL - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Align Technology, carrying a Zacks Rank of 2 (Buy), reported first-quarter 2024 adjusted EPS of $2.14, beating the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.
Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, beating the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.5%.
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QuidelOrtho (QDEL) Q1 Earnings Beat Estimates, Margins Fall
QuidelOrtho Corporation (QDEL - Free Report) delivered adjusted earnings per share (EPS) of 44 cents in the first quarter of 2024, down by 75.6% year over year. However, the figure beat the Zacks Consensus Estimate by 1 cent.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
GAAP loss per share for the quarter was $25.50 against the year-ago quarter EPS of 73 cents.
Revenues in Detail
QuidelOrtho registered revenues of $711 million in the first quarter, which decreased 16% year over year on a reported basis and 15.5% at constant exchange rate (CER). The figure beat the Zacks Consensus Estimate by 1.96%.
In the first quarter, QuidelOrtho’s total revenues, excluding COVID-19-related revenues, were $660.8 million (up 4.9% on a reported basis and 5.9% at CER).
In the first quarter, Respiratory revenues were $137.3 million (down 48.3%, both on a reported basis and at CER). Excluding government COVID-19 orders, respiratory revenues grew 6% both on a reported basis and CER.
Non-Respiratory revenues were $573.7 million (down 1.2% on a reported basis and 0.2% at CER). Excluding the one-time third-party collaboration settlement in the first quarter of 2023, non-respiratory revenue grew 3% on a reported basis and 4% in CER.
Segments in Detail
QuidelOrtho now derives revenues from four business units — Labs, Transfusion Medicine (TM), Point-Of-Care (POC) and Molecular Diagnostics (MDx).
In the first quarter, Labs revenues were $356.9 million, down 3.7% and 2.9% on a reported basis and at CER, respectively. Labs revenues grew approximately 4% year over year, excluding the one-time third-party collaboration settlement in the prior-year period.
TM revenues were $160.3 million in the first quarter, up 2.8% and 4.1% on a reported basis and at CER, respectively. The growth was driven by the company’s immunohematology reagent group across regions in the ORTHO VISION Swift and ORTHO VISION Max Swift instrument placements.
POC revenues amounted to $186.6 million in the first quarter, reflecting a decline of 39.4% and 39.3% on a reported basis and at CER, respectively. Excluding COVID-19 revenues, POC business grew approximately 38% year over year.
MDx revenues totaled $7.2 million in the first quarter, down 36.8% on a reported basis and 36.7% at CER. Excluding COVID-19 revenues, MDx business grew approximately 15% year over year.
Geographical Distribution
Geographically, QuidelOrtho derives revenues from North America, Europe, the Middle East and Africa (EMEA), China and Other regions (which includes Latin America, Japan and other Asia-Pacific markets).
Revenues from North America amounted to $433.9 million, reflecting a decline of 25.5% and 25.3% on a reported basis and at CER, respectively.
EMEA revenues amounted to $84.8 million, reflecting an uptick of 4.3% and 3.8% on a reported basis and at CER, respectively.
Revenues from China amounted to $76.1 million, reflecting an improvement of 7.8% on a reported basis and 12.1% at CER.
Revenues from Other regions amounted to $116.2 million, reflecting an uptick of 4.3% on a reported basis and 5.9% at CER.
Margin Trend
In the quarter under review, QuidelOrtho’s adjusted gross profit declined 25.8% to $337.9 million. The adjusted gross margin contracted 630 basis points (bps) to 47.5%.
Selling, marketing and administrative expenses increased 1.1% to $204.7 million. Research and development expenses declined 4.9% year over year to $59.2 million. Adjusted operating expenses were approximately flat year over year.
Adjusted operating income totaled $79.1 million, reflecting a 59% decline from the prior-year quarter’s level. Adjusted operating margin in the first quarter contracted 1170 bps to 11.1%.
Financial Position
QuidelOrtho exited first-quarter 2024 with cash and cash equivalents of $78.5 million compared with $118.9 million at the end of the fourth quarter. Total debt (including short-term debt) at the end of first-quarter 2024 was $2.40 billion compared with $2.41 billion at the fourth-quarter end.
Net cash used in operating activities at the end of first-quarter 2024 was $0.7 million against net cash provided of $188.9 million a year ago.
2024 Guidance Update
Per management, QuidelOrtho has suspended its 2024 financial guidance while it assesses the business under its new president and chief executive officer. The company intends to resume providing guidance later in the year.
Our Take
QuidelOrtho’s earnings and revenues beat the Zacks Consensus Estimate in the first quarter of 2024. Excluding COVID-19 revenue impact, the company witnessed growth in total revenues. Excluding the one-time third-party collaboration settlement in the year-ago period, the company registered revenue growth in its Labs segment. Growth in China and Other regions, excluding COVID-19 revenues, was encouraging. QuidelOrtho also recorded strong revenue growth in the EMEA region, which buoys optimism.
The continued uptick in Sofia instruments and growth in QuidelOrtho’s integrated installed base and automation were encouraging.
In April 2024, QuidelOrtho announced the addition of the ARK Fentanyl II Assay to its U.S. Vitros XT 7600 and 5600 Integrated Systems as well as its Vitros 4600 Chemistry System menu of assays as a MicroTip Partnership Assay. This addition is likely to significantly boost QuidelOrtho’s Labs business unit across the United States.
QuidelOrtho also announced the FDA 510(k) clearance for its QuickVue COVID-19 test. With CLIA certificates of waiver, this approval permits the test to be used accurately and conveniently in home and medical healthcare settings.
In March 2024, the company announced the receipt of Health Canada’s approval for its Triage PLGF (placental growth factor) test for laboratory use in Canada.
However, including the COVID-19 revenue impact, the company witnessed revenue decline in all the segments year over year except for TM. The revenue decline in the North American region was discouraging as well.
QuidelOrtho Corporation Price, Consensus and EPS Surprise
QuidelOrtho Corporation price-consensus-eps-surprise-chart | QuidelOrtho Corporation Quote
Zacks Rank and Key Picks
QuidelOrtho currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. (ALGN - Free Report) , Ecolab (ECL - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Align Technology, carrying a Zacks Rank of 2 (Buy), reported first-quarter 2024 adjusted EPS of $2.14, beating the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.
Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, beating the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.5%.