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QuidelOrtho (QDEL) Q3 Earnings Top Estimates, 2022 View Revised
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QuidelOrtho Corporation (QDEL - Free Report) delivered adjusted earnings per share (EPS) of $1.85 in the third quarter of 2022, down 64.6% year over year. The figure topped the Zacks Consensus Estimate by 208.3%.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
Supplemental combined adjusted EPS for the quarter was $1.85, down 53.9% year over year.
GAAP EPS for the quarter was 28 cents, reflecting a 94.5% plunge from the year-earlier figure.
Revenues in Detail
QuidelOrtho registered revenues of $783.8 million in the third quarter, which climbed 53.7% year over year. The figure surpassed the Zacks Consensus Estimate by 19.7%.
Supplemental combined revenues in the reported quarter were $783.8 million, down by 24.1% on a reported basis and down 21.8% at constant exchange rate (CER). Excluding COVID-19 revenue, supplemental combined revenues at CER improved 3%.
The year-over-year revenue surge was primarily led by the consummation of the business combination that occurred on May 27, 2022, between Quidel Corporation and Ortho Clinical Diagnostics Holdings plc.
Segments in Detail
QuidelOrtho now derives revenues from four business units — Point-Of-Care (POC), Labs, Transfusion Medicine (TM) and Molecular Diagnostics (MDx).
In the third quarter, POC revenues amounted to $270.5 million, reflecting a decline of 39% on a reported basis and down 38.5% at CER. Excluding COVID-19 revenue, POC revenues at CER improved 28.5%.
Labs revenues were $334.8 million in the third quarter, down 7.8% and 4.5% on a reported basis and at CER. Excluding COVID-19 revenue, Labs revenues at CER declined 2.7%.
MDx revenues totaled $15.4 million in the third quarter, down 71.9% and 71.6% on a reported basis and at CER. Excluding COVID-19 revenue, MDx revenues at CER declined 0.6%.
TM revenues were $163.1 million in the third quarter, down 4.5% on a reported basis but up 1.2% at CER.
Geographical Distribution
Geographically, QuidelOrtho derives revenues from North America, EMEA, China and Other regions (which includes Latin America, Japan and other Asia-Pacific markets).
Revenues from North America amounted to $517.6 million, reflecting a decline of 29.1% on a reported basis. Excluding COVID-19 revenue, revenues at CER improved 5.7%.
EMEA revenues amounted to $73.7 million, reflecting a decline of 10% on a reported basis but an uptick of 0.7% at CER. Excluding COVID-19 revenue, EMEA revenues at CER improved 2%.
Revenues from China amounted to $80.8 million, reflecting a decline of 17.4% on a reported basis and down 12.5% at CER.
Revenues from Other regions amounted to $111.7 million, reflecting a decline of 8.7% on a reported basis. Excluding COVID-19 revenue, revenues at CER improved 9.4%.
QuidelOrtho Corporation Price, Consensus and EPS Surprise
In the quarter under review, QuidelOrtho’s gross profit rose 8.6% to $407.5 million. However, the gross margin contracted by a huge 2165 basis points (bps) to 51.9%.
Selling, marketing and administrative expenses rose 224.1% to $204.2 million. Research and development expenses went up 176.8% year over year to $65.6 million. Adjusted operating expenses of $269.8 million surged 211.2% year over year.
Adjusted operating profit totaled $137.7 million, reflecting a 52.3% decline from the prior-year quarter’s level. Adjusted operating margin in the third quarter contracted a huge 3906 bps to 17.6%.
Financial Position
QuidelOrtho exited third-quarter 2022 with cash and cash equivalents of $212.2 million compared with $379 million at the end of the second quarter. Total debt (including short-term debt) at the end of third-quarter 2022 was $2.69 billion compared with $2.74 billion at the end of the second quarter.
Cumulative net cash flow from operating activities at the end of the third quarter was $715.9 million compared with $484.5 million a year ago.
Guidance
QuidelOrtho has revised its financial outlook for the full-year 2022.
Supplemental combined full-year revenues, excluding COVID-related sales, are now expected to be in the range of $2.48 billion to $2.53 billion (reflecting growth of 7-9% at CER), lowered from the previous outlook of $2.49 billion-$2.57 billion (reflecting growth of 6-9% at CER). COVID-related revenues are now likely to be within $1.4 billion to $1.43 billion in 2022, up from the prior outlook of $1.29 billion-$1.34 billion. The Zacks Consensus Estimate for the same stands at $3.57 billion.
Total revenue growth at CER is now expected within $3.88 billion to $3.96 billion (reflecting growth of 6-8%), up from the previous outlook of $3.78 billion to $3.91 billion (reflecting growth of 3-6%).
Adjusted EPS is now expected to lie within $13.20-$13.80, up from the prior guidance of $11.80-$12.75. The Zacks Consensus Estimate for the same stands at $12.12.
Our Take
QuidelOrtho ended the third quarter of 2022 with better-than-expected results. Its robust overall top-line performance, driven by POC and Donor Screening product lines, was impressive. The company recorded strong revenues in the majority of its geographies at CER, excluding COVID-19 revenues. Continued strength in QuidelOrtho’s comprehensive product portfolio and expanded global commercial footprint also raise optimism about the stock. The progress made by the company regarding the integration of its QuidelOrtho business is also promising.
However, dismal bottom-line results and lower supplemental combined revenues are disappointing. The decline in all its business units and geographies on a reported basis is discouraging. The decline in Recurring revenues on a reported basis is worrying as well. The contraction of both margins also does not bode well. QuidelOrtho continued to face inflation and supply-chain challenges, raising our apprehensions.
Zacks Rank and Other Key Picks
QuidelOrtho currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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QuidelOrtho (QDEL) Q3 Earnings Top Estimates, 2022 View Revised
QuidelOrtho Corporation (QDEL - Free Report) delivered adjusted earnings per share (EPS) of $1.85 in the third quarter of 2022, down 64.6% year over year. The figure topped the Zacks Consensus Estimate by 208.3%.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
Supplemental combined adjusted EPS for the quarter was $1.85, down 53.9% year over year.
GAAP EPS for the quarter was 28 cents, reflecting a 94.5% plunge from the year-earlier figure.
Revenues in Detail
QuidelOrtho registered revenues of $783.8 million in the third quarter, which climbed 53.7% year over year. The figure surpassed the Zacks Consensus Estimate by 19.7%.
Supplemental combined revenues in the reported quarter were $783.8 million, down by 24.1% on a reported basis and down 21.8% at constant exchange rate (CER). Excluding COVID-19 revenue, supplemental combined revenues at CER improved 3%.
The year-over-year revenue surge was primarily led by the consummation of the business combination that occurred on May 27, 2022, between Quidel Corporation and Ortho Clinical Diagnostics Holdings plc.
Segments in Detail
QuidelOrtho now derives revenues from four business units — Point-Of-Care (POC), Labs, Transfusion Medicine (TM) and Molecular Diagnostics (MDx).
In the third quarter, POC revenues amounted to $270.5 million, reflecting a decline of 39% on a reported basis and down 38.5% at CER. Excluding COVID-19 revenue, POC revenues at CER improved 28.5%.
Labs revenues were $334.8 million in the third quarter, down 7.8% and 4.5% on a reported basis and at CER. Excluding COVID-19 revenue, Labs revenues at CER declined 2.7%.
MDx revenues totaled $15.4 million in the third quarter, down 71.9% and 71.6% on a reported basis and at CER. Excluding COVID-19 revenue, MDx revenues at CER declined 0.6%.
TM revenues were $163.1 million in the third quarter, down 4.5% on a reported basis but up 1.2% at CER.
Geographical Distribution
Geographically, QuidelOrtho derives revenues from North America, EMEA, China and Other regions (which includes Latin America, Japan and other Asia-Pacific markets).
Revenues from North America amounted to $517.6 million, reflecting a decline of 29.1% on a reported basis. Excluding COVID-19 revenue, revenues at CER improved 5.7%.
EMEA revenues amounted to $73.7 million, reflecting a decline of 10% on a reported basis but an uptick of 0.7% at CER. Excluding COVID-19 revenue, EMEA revenues at CER improved 2%.
Revenues from China amounted to $80.8 million, reflecting a decline of 17.4% on a reported basis and down 12.5% at CER.
Revenues from Other regions amounted to $111.7 million, reflecting a decline of 8.7% on a reported basis. Excluding COVID-19 revenue, revenues at CER improved 9.4%.
QuidelOrtho Corporation Price, Consensus and EPS Surprise
QuidelOrtho Corporation price-consensus-eps-surprise-chart | QuidelOrtho Corporation Quote
Margin Trend
In the quarter under review, QuidelOrtho’s gross profit rose 8.6% to $407.5 million. However, the gross margin contracted by a huge 2165 basis points (bps) to 51.9%.
Selling, marketing and administrative expenses rose 224.1% to $204.2 million. Research and development expenses went up 176.8% year over year to $65.6 million. Adjusted operating expenses of $269.8 million surged 211.2% year over year.
Adjusted operating profit totaled $137.7 million, reflecting a 52.3% decline from the prior-year quarter’s level. Adjusted operating margin in the third quarter contracted a huge 3906 bps to 17.6%.
Financial Position
QuidelOrtho exited third-quarter 2022 with cash and cash equivalents of $212.2 million compared with $379 million at the end of the second quarter. Total debt (including short-term debt) at the end of third-quarter 2022 was $2.69 billion compared with $2.74 billion at the end of the second quarter.
Cumulative net cash flow from operating activities at the end of the third quarter was $715.9 million compared with $484.5 million a year ago.
Guidance
QuidelOrtho has revised its financial outlook for the full-year 2022.
Supplemental combined full-year revenues, excluding COVID-related sales, are now expected to be in the range of $2.48 billion to $2.53 billion (reflecting growth of 7-9% at CER), lowered from the previous outlook of $2.49 billion-$2.57 billion (reflecting growth of 6-9% at CER). COVID-related revenues are now likely to be within $1.4 billion to $1.43 billion in 2022, up from the prior outlook of $1.29 billion-$1.34 billion. The Zacks Consensus Estimate for the same stands at $3.57 billion.
Total revenue growth at CER is now expected within $3.88 billion to $3.96 billion (reflecting growth of 6-8%), up from the previous outlook of $3.78 billion to $3.91 billion (reflecting growth of 3-6%).
Adjusted EPS is now expected to lie within $13.20-$13.80, up from the prior guidance of $11.80-$12.75. The Zacks Consensus Estimate for the same stands at $12.12.
Our Take
QuidelOrtho ended the third quarter of 2022 with better-than-expected results. Its robust overall top-line performance, driven by POC and Donor Screening product lines, was impressive. The company recorded strong revenues in the majority of its geographies at CER, excluding COVID-19 revenues. Continued strength in QuidelOrtho’s comprehensive product portfolio and expanded global commercial footprint also raise optimism about the stock. The progress made by the company regarding the integration of its QuidelOrtho business is also promising.
However, dismal bottom-line results and lower supplemental combined revenues are disappointing. The decline in all its business units and geographies on a reported basis is discouraging. The decline in Recurring revenues on a reported basis is worrying as well. The contraction of both margins also does not bode well. QuidelOrtho continued to face inflation and supply-chain challenges, raising our apprehensions.
Zacks Rank and Other Key Picks
QuidelOrtho currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.