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QuidelOrtho (QDEL) Q2 Earnings Top Estimates, FY23 View Revised
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QuidelOrtho Corporation (QDEL - Free Report) delivered adjusted earnings per share (EPS) of 26 cents in the second quarter of 2023, down by 88.9% year over year. The figure topped the Zacks Consensus Estimate by a penny.
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 also 26 cents, down 87.7% year over year.
GAAP loss per share for the quarter was 80 cents against the year-earlier EPS of 36 cents.
Revenues in Detail
QuidelOrtho registered revenues of $665.1 million in the second quarter, which increased 8.4% year over year. The figure surpassed the Zacks Consensus Estimate by 7.3%.
In the reported quarter, supplemental combined revenues of $665.1 million were down 26% on a reported basis and down 25.9% at constant exchange rate (CER).
In the second quarter, Respiratory revenues were $89 million (down 73.8% on both reported basis and at CER), while Non-Respiratory revenues were up $576.1 million (up 3% and 4.1% on reported basis and at CER, respectively).
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 second quarter, Labs revenues were $361.4 million, up 5.7% and 7% on a reported basis and at CER, respectively. This compares to our second-quarter projections of $248.6 million.
TM revenues were $163.3 million in the second quarter, down 3.3% and 2.5% on a reported basis and at CER, respectively. This compares to our second-quarter projections of $118.6 million.
POC revenues amounted to $134.2 million in the second quarter, reflecting a decline of 63.4% and 63.5 % on a reported basis and at CER, respectively. This compares to our second-quarter projections of $239.5 million.
MDx revenues totaled $6.2 million in the second quarter, down 70% both on a reported basis and at CER. This compares to our second-quarter projections of $11.3 million.
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 $378.8 million, reflecting a decline of 36.4% and 36.1% on a reported basis and at CER, respectively. This compares to our second-quarter projections of $421.3 million.
EMEA revenues amounted to $80.6 million, reflecting a decline of 2.8% on a reported basis and down 2.5% at CER. This compares to our second-quarter projections of $57.1 million.
Revenues from China amounted to $81.3 million, reflecting a decline of 15.4% on a reported basis and 13.4% at CER. This compares to our second-quarter projections of $55.5 million.
Revenues from Other regions amounted to $124.4 million, reflecting an uptick of 0.5% on a reported basis and 1.1% at CER. This compares to our second-quarter projections of $84.1 million.
QuidelOrtho Corporation Price, Consensus and EPS Surprise
In the quarter under review, QuidelOrtho’s gross profit declined 12.2% to $296.4 million. The gross margin contracted by a huge 1046 basis points (bps) to 44.6%.
We had projected 42.9% of gross margin for the second quarter.
Selling, marketing and administrative expenses rose 51.3% to $179.1 million. Research and development expenses went up 83.6% year over year to $62.8 million. Adjusted operating expenses of $241.9 million surged 58.5% year over year.
Adjusted operating profit totaled $54.5 million, reflecting a 70.5% decline from the prior-year quarter’s level. Adjusted operating margin in the second quarter contracted a huge 2195 bps to 8.2%.
Financial Position
QuidelOrtho exited second-quarter 2023 with cash and cash equivalents of $178.6 million compared with $353.9 million at the end of first quarter. Total debt (including short-term debt) at the end of second-quarter 2023 was $2.52 billion compared with $2.59 billion at the first-quarter end.
Cumulative net cash flow from operating activities at the end of second-quarter 2023 was $158.3 million compared with $725.6 million a year ago.
Guidance
QuidelOrtho has revised its financial outlook for 2023.
Total revenues are now expected to lie within $2.88 billion-$3.08 billion, narrowed from the earlier guidance of $2.87 billion-$3.18 billion. The Zacks Consensus Estimate for the same stands at $2.99 billion.
Non-respiratory revenues are now expected to be between $2.27 billion and $2.31 billion (up 5-6.5% at CER from 2022 levels), narrowed from the earlier projections of $2.26 billion and $2.31 billion (up 4.5-6.5% at CER from 2022 levels).
Respiratory revenues for the full year are now expected to lie in the range of $610 million-$775 million, narrowed from the earlier projections of $610 million-$875 million. The respiratory revenues now include COVID-related revenues of $300 million to $400 million, narrowed from the earlier projections of $300 million-$500 million.
Adjusted EPS is now expected to lie between $4.85 and $5.30, lowered from the prior guidance of $5.15-$5.70. The Zacks Consensus Estimate for the same stands at $5.28.
Our Take
QuidelOrtho ended the second quarter of 2023 with better-than-expected results. An uptick in the company’s overall top line and Non-Respiratory revenues was impressive.
The company registered robust revenues from its Labs segment and Other region, which were encouraging. The company also recorded solid revenues from its Instrument revenue category, which was promising. The continued uptick in Sofia non-COVID pull-through and growth in QuidelOrtho’s integrated installed base and automation were encouraging.
During the quarter, QuidelOrtho completed the Savanna Emergency Use Authorization and 510(k) FDA submissions, including 510(k) for the instrument in both RVP4 and HSV VZV lesion panels. These look promising for the stock.
However, dismal bottom-line results and lower supplemental combined revenues were disappointing. The decline in the majority of its business units and geographies was discouraging. The decline in QuickVue and Recurring revenues was also worrying. The contraction of both margins also does not bode well.
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 DexCom, Inc. (DXCM - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
DexCom, carrying a Zacks Rank of 2, reported second-quarter 2023 adjusted EPS of 34 cents, beating the Zacks Consensus Estimate by 54.6%. Revenues of $871.3 million outpaced the consensus mark by 4.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 42.9%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 28.8%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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QuidelOrtho (QDEL) Q2 Earnings Top Estimates, FY23 View Revised
QuidelOrtho Corporation (QDEL - Free Report) delivered adjusted earnings per share (EPS) of 26 cents in the second quarter of 2023, down by 88.9% year over year. The figure topped the Zacks Consensus Estimate by a penny.
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 also 26 cents, down 87.7% year over year.
GAAP loss per share for the quarter was 80 cents against the year-earlier EPS of 36 cents.
Revenues in Detail
QuidelOrtho registered revenues of $665.1 million in the second quarter, which increased 8.4% year over year. The figure surpassed the Zacks Consensus Estimate by 7.3%.
In the reported quarter, supplemental combined revenues of $665.1 million were down 26% on a reported basis and down 25.9% at constant exchange rate (CER).
In the second quarter, Respiratory revenues were $89 million (down 73.8% on both reported basis and at CER), while Non-Respiratory revenues were up $576.1 million (up 3% and 4.1% on reported basis and at CER, respectively).
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 second quarter, Labs revenues were $361.4 million, up 5.7% and 7% on a reported basis and at CER, respectively. This compares to our second-quarter projections of $248.6 million.
TM revenues were $163.3 million in the second quarter, down 3.3% and 2.5% on a reported basis and at CER, respectively. This compares to our second-quarter projections of $118.6 million.
POC revenues amounted to $134.2 million in the second quarter, reflecting a decline of 63.4% and 63.5 % on a reported basis and at CER, respectively. This compares to our second-quarter projections of $239.5 million.
MDx revenues totaled $6.2 million in the second quarter, down 70% both on a reported basis and at CER. This compares to our second-quarter projections of $11.3 million.
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 $378.8 million, reflecting a decline of 36.4% and 36.1% on a reported basis and at CER, respectively. This compares to our second-quarter projections of $421.3 million.
EMEA revenues amounted to $80.6 million, reflecting a decline of 2.8% on a reported basis and down 2.5% at CER. This compares to our second-quarter projections of $57.1 million.
Revenues from China amounted to $81.3 million, reflecting a decline of 15.4% on a reported basis and 13.4% at CER. This compares to our second-quarter projections of $55.5 million.
Revenues from Other regions amounted to $124.4 million, reflecting an uptick of 0.5% on a reported basis and 1.1% at CER. This compares to our second-quarter projections of $84.1 million.
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 declined 12.2% to $296.4 million. The gross margin contracted by a huge 1046 basis points (bps) to 44.6%.
We had projected 42.9% of gross margin for the second quarter.
Selling, marketing and administrative expenses rose 51.3% to $179.1 million. Research and development expenses went up 83.6% year over year to $62.8 million. Adjusted operating expenses of $241.9 million surged 58.5% year over year.
Adjusted operating profit totaled $54.5 million, reflecting a 70.5% decline from the prior-year quarter’s level. Adjusted operating margin in the second quarter contracted a huge 2195 bps to 8.2%.
Financial Position
QuidelOrtho exited second-quarter 2023 with cash and cash equivalents of $178.6 million compared with $353.9 million at the end of first quarter. Total debt (including short-term debt) at the end of second-quarter 2023 was $2.52 billion compared with $2.59 billion at the first-quarter end.
Cumulative net cash flow from operating activities at the end of second-quarter 2023 was $158.3 million compared with $725.6 million a year ago.
Guidance
QuidelOrtho has revised its financial outlook for 2023.
Total revenues are now expected to lie within $2.88 billion-$3.08 billion, narrowed from the earlier guidance of $2.87 billion-$3.18 billion. The Zacks Consensus Estimate for the same stands at $2.99 billion.
Non-respiratory revenues are now expected to be between $2.27 billion and $2.31 billion (up 5-6.5% at CER from 2022 levels), narrowed from the earlier projections of $2.26 billion and $2.31 billion (up 4.5-6.5% at CER from 2022 levels).
Respiratory revenues for the full year are now expected to lie in the range of $610 million-$775 million, narrowed from the earlier projections of $610 million-$875 million. The respiratory revenues now include COVID-related revenues of $300 million to $400 million, narrowed from the earlier projections of $300 million-$500 million.
Adjusted EPS is now expected to lie between $4.85 and $5.30, lowered from the prior guidance of $5.15-$5.70. The Zacks Consensus Estimate for the same stands at $5.28.
Our Take
QuidelOrtho ended the second quarter of 2023 with better-than-expected results. An uptick in the company’s overall top line and Non-Respiratory revenues was impressive.
The company registered robust revenues from its Labs segment and Other region, which were encouraging. The company also recorded solid revenues from its Instrument revenue category, which was promising. The continued uptick in Sofia non-COVID pull-through and growth in QuidelOrtho’s integrated installed base and automation were encouraging.
During the quarter, QuidelOrtho completed the Savanna Emergency Use Authorization and 510(k) FDA submissions, including 510(k) for the instrument in both RVP4 and HSV VZV lesion panels. These look promising for the stock.
However, dismal bottom-line results and lower supplemental combined revenues were disappointing. The decline in the majority of its business units and geographies was discouraging. The decline in QuickVue and Recurring revenues was also worrying. The contraction of both margins also does not bode well.
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 DexCom, Inc. (DXCM - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
DexCom, carrying a Zacks Rank of 2, reported second-quarter 2023 adjusted EPS of 34 cents, beating the Zacks Consensus Estimate by 54.6%. Revenues of $871.3 million outpaced the consensus mark by 4.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 42.9%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 28.8%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.