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QIAGEN N.V.’s (QGEN - Free Report) fourth-quarter 2023 adjusted earnings per share (EPS) were 55 cents (same at a constant exchange rate or CER), up 3.8% from the prior-year period. However, the figure missed the Zacks Consensus Estimate by 1.8%.
The adjustment excludes the impact of certain non-recurring items like business integration, acquisition and restructuring-related expenses, purchased intangible amortization expenses and non-cash interest expense charges, among others.
The GAAP EPS for the quarter was 42 cents, up 7.7% year over year.
For the full year, adjusted earnings were $2.07 per share, down 13% from the year-ago period’s levels. The reported figure fell short of the Zacks Consensus Estimate by 2.4%.
Revenues in Detail
Net sales in the fourth quarter were up 2.2% year over year to $509.2 million (up 1% at CER). The top line beat the Zacks Consensus Estimate by 1%. Sales at CER were $503 million, ahead of the outlook of at least $500 million. Fourth-quarter sales were driven by 8% CER growth in the non-COVID-19 portfolio.
Total revenues for 2023 were $1.97 billion, down 8.2% from the year-ago period’s levels. The figure surpassed the Zacks Consensus Estimate by 0.5%.
In the quarter under review, sales from the Americas (50.3% of sales) totaled $256 million, up 6% year over year (up 6% at CER). Our model projected a year-over-year increase of 8.6% in this region.
The CER improvement was led by gains in the United States, which more than offset the headwinds from COVID-19 sales in the year-ago period.
Revenues from Europe, the Middle East and Africa (34% of sales) were up 2.4% reportedly (down 1% at CER) to $173 million. Our model’s projection was a year-over-year decline of 4.5%. Sales for non-COVID-19 product groups rose at a double-digit CER rate for both the fourth quarter and fiscal year 2023.
Revenues from Asia-Pacific/Japan (15.7% of sales) fell 9% year over year on a reported basis (down 8% at CER) to $80 million. This was wider than our model’s projected decline of 2.6% year over year.
Per the company, sales for non-COVID-19 product groups declined at a modest single-digit CER rate in the fourth quarter. Non-COVID sales for the region, excluding China, rose at a single-digit CER rate in the fourth quarter. In China (which comprised more than 6% of total QIAGEN sales in fiscal year 2023), sales declined more than 10% CER compared to the year-ago period due to ongoing weaker macroeconomic trends.
Segmental Details
As of the fourth quarter of 2023, QIAGEN had two major customer classes — Molecular Diagnostics and Life Sciences.
Molecular Diagnostics (representing 53.2% of net sales) revenues were up 5% on a reported basis (up 4% at CER) to $271 million. Our model projected year-over-year growth of 3.3% from this segment.
Life Sciences (46.8% of total revenues) reported revenues of $238 million, down 1% on a reported basis (down 2% at CER). Our model projected the segment’s revenues to improve 1% compared to last year’s same period.
Operational Update
The adjusted gross profit (excluding the amortization of acquisition-related intangibles) in the quarter under review fell 0.5% to $316.1 million.
Meanwhile, the adjusted gross margin contracted 168 basis points (bps) to 62.1% on a 7% rise in the cost of sales (excluding amortization) to $177 million.
Sales and marketing expenses of QIAGEN fell 3.9% year over year to $117.5 million. R&D expenses of $49 million were up 2.7% compared to the prior year’s quarter. G&A expenses declined 10.9% year over year to $28 million.
The adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring and integration and others) increased 4.7% year over year to $124.2 million in the fourth quarter. Meanwhile, the adjusted operating margin expanded 57 bps to 24.4%.
Financial Update
QIAGEN exited the fourth quarter of 2023 with cash and cash equivalents and short-term investments of $1.06 billion compared with $1.42 billion as of Dec 31, 2022. The long-term debt (net of current portion) was $921.8 million at the end of the fourth quarter of 2023 compared with $1.47 billion at the end of 2022.
The cumulative net cash provided by operating activities at the end of the fourth quarter of 2023 was $459.5 million compared with $715.3 million in the year-ago period.
Guidance
QIAGEN initiated its financial outlook for 2024.
Full-year net sales are expected to be nearly $2.0 billion at CER. Consumables and related revenues are expected to drive growth, while larger-scale instrument sales remain challenging. The Zacks Consensus Estimate for 2024 revenues is pegged at $2.04 billion.
The adjusted EPS for 2024 is expected to be about $2.10 at CER. The Zacks Consensus Estimate for adjusted EPS is pegged at $2.18.
For the first quarter of 2024, the company expects net sales of at least $455 million at CER. The Zacks Consensus Estimate is pegged at $492.3 million.
The adjusted EPS is expected to be at least 44 cents at CER. The Zacks Consensus Estimate for the adjusted EPS is pegged at 51 cents.
Our Take
QIAGEN ended the fourth quarter of 2023 with an earnings miss, while revenues were better than expected. The company made remarkable progress in driving the growth of the consumables business (accounting for more than 85% of sales) while expanding the installed instrument base. The expansion of the adjusted operation margin in the quarter is highly appreciated.
The company headlined on many occasions in the quarter, including partnerships with Myriad Genetics to advance companion diagnostics development for cancer and with Element Biosciences to offer NGS (next-generation sequencing) workflows for the AVITI System. QIAGEN also targets accelerated investments in its QIAGEN Digital Insights (“QDI”) bioinformatics business over the next five years to expand QDI’s offerings in new geographic regions and market segments. All these developments bode well for the stock.
Meanwhile, the contraction of the gross margin is discouraging. Reduced guidance for the full year is discouraging. Ongoing weaker macroeconomic trends resulted in a sales decline in China in the quarter.
Zacks Rank and Key Picks
QIAGEN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Boston Scientific (BSX - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Boston Scientific, carrying a Zacks Rank #2, reported a fourth-quarter 2024 adjusted EPS of 55 cents, which beat the Zacks Consensus Estimate by 7.8%. Revenues of $3.73 billion outpaced the Zacks Consensus Estimate by 3.8%.
BSX has a long-term estimated earnings growth rate of 12.7%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 7.4%.
Cardinal Health reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.
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QIAGEN (QGEN) Q4 Earnings Miss, Operating Margin Expands
QIAGEN N.V.’s (QGEN - Free Report) fourth-quarter 2023 adjusted earnings per share (EPS) were 55 cents (same at a constant exchange rate or CER), up 3.8% from the prior-year period. However, the figure missed the Zacks Consensus Estimate by 1.8%.
The adjustment excludes the impact of certain non-recurring items like business integration, acquisition and restructuring-related expenses, purchased intangible amortization expenses and non-cash interest expense charges, among others.
The GAAP EPS for the quarter was 42 cents, up 7.7% year over year.
For the full year, adjusted earnings were $2.07 per share, down 13% from the year-ago period’s levels. The reported figure fell short of the Zacks Consensus Estimate by 2.4%.
Revenues in Detail
Net sales in the fourth quarter were up 2.2% year over year to $509.2 million (up 1% at CER). The top line beat the Zacks Consensus Estimate by 1%. Sales at CER were $503 million, ahead of the outlook of at least $500 million. Fourth-quarter sales were driven by 8% CER growth in the non-COVID-19 portfolio.
Total revenues for 2023 were $1.97 billion, down 8.2% from the year-ago period’s levels. The figure surpassed the Zacks Consensus Estimate by 0.5%.
QIAGEN N.V. Price, Consensus and EPS Surprise
QIAGEN N.V. price-consensus-eps-surprise-chart | QIAGEN N.V. Quote
Geographical Revenue Analysis
In the quarter under review, sales from the Americas (50.3% of sales) totaled $256 million, up 6% year over year (up 6% at CER). Our model projected a year-over-year increase of 8.6% in this region.
The CER improvement was led by gains in the United States, which more than offset the headwinds from COVID-19 sales in the year-ago period.
Revenues from Europe, the Middle East and Africa (34% of sales) were up 2.4% reportedly (down 1% at CER) to $173 million. Our model’s projection was a year-over-year decline of 4.5%. Sales for non-COVID-19 product groups rose at a double-digit CER rate for both the fourth quarter and fiscal year 2023.
Revenues from Asia-Pacific/Japan (15.7% of sales) fell 9% year over year on a reported basis (down 8% at CER) to $80 million. This was wider than our model’s projected decline of 2.6% year over year.
Per the company, sales for non-COVID-19 product groups declined at a modest single-digit CER rate in the fourth quarter. Non-COVID sales for the region, excluding China, rose at a single-digit CER rate in the fourth quarter. In China (which comprised more than 6% of total QIAGEN sales in fiscal year 2023), sales declined more than 10% CER compared to the year-ago period due to ongoing weaker macroeconomic trends.
Segmental Details
As of the fourth quarter of 2023, QIAGEN had two major customer classes — Molecular Diagnostics and Life Sciences.
Molecular Diagnostics (representing 53.2% of net sales) revenues were up 5% on a reported basis (up 4% at CER) to $271 million. Our model projected year-over-year growth of 3.3% from this segment.
Life Sciences (46.8% of total revenues) reported revenues of $238 million, down 1% on a reported basis (down 2% at CER). Our model projected the segment’s revenues to improve 1% compared to last year’s same period.
Operational Update
The adjusted gross profit (excluding the amortization of acquisition-related intangibles) in the quarter under review fell 0.5% to $316.1 million.
Meanwhile, the adjusted gross margin contracted 168 basis points (bps) to 62.1% on a 7% rise in the cost of sales (excluding amortization) to $177 million.
Sales and marketing expenses of QIAGEN fell 3.9% year over year to $117.5 million. R&D expenses of $49 million were up 2.7% compared to the prior year’s quarter. G&A expenses declined 10.9% year over year to $28 million.
The adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring and integration and others) increased 4.7% year over year to $124.2 million in the fourth quarter. Meanwhile, the adjusted operating margin expanded 57 bps to 24.4%.
Financial Update
QIAGEN exited the fourth quarter of 2023 with cash and cash equivalents and short-term investments of $1.06 billion compared with $1.42 billion as of Dec 31, 2022. The long-term debt (net of current portion) was $921.8 million at the end of the fourth quarter of 2023 compared with $1.47 billion at the end of 2022.
The cumulative net cash provided by operating activities at the end of the fourth quarter of 2023 was $459.5 million compared with $715.3 million in the year-ago period.
Guidance
QIAGEN initiated its financial outlook for 2024.
Full-year net sales are expected to be nearly $2.0 billion at CER. Consumables and related revenues are expected to drive growth, while larger-scale instrument sales remain challenging. The Zacks Consensus Estimate for 2024 revenues is pegged at $2.04 billion.
The adjusted EPS for 2024 is expected to be about $2.10 at CER. The Zacks Consensus Estimate for adjusted EPS is pegged at $2.18.
For the first quarter of 2024, the company expects net sales of at least $455 million at CER. The Zacks Consensus Estimate is pegged at $492.3 million.
The adjusted EPS is expected to be at least 44 cents at CER. The Zacks Consensus Estimate for the adjusted EPS is pegged at 51 cents.
Our Take
QIAGEN ended the fourth quarter of 2023 with an earnings miss, while revenues were better than expected. The company made remarkable progress in driving the growth of the consumables business (accounting for more than 85% of sales) while expanding the installed instrument base. The expansion of the adjusted operation margin in the quarter is highly appreciated.
The company headlined on many occasions in the quarter, including partnerships with Myriad Genetics to advance companion diagnostics development for cancer and with Element Biosciences to offer NGS (next-generation sequencing) workflows for the AVITI System. QIAGEN also targets accelerated investments in its QIAGEN Digital Insights (“QDI”) bioinformatics business over the next five years to expand QDI’s offerings in new geographic regions and market segments. All these developments bode well for the stock.
Meanwhile, the contraction of the gross margin is discouraging. Reduced guidance for the full year is discouraging. Ongoing weaker macroeconomic trends resulted in a sales decline in China in the quarter.
Zacks Rank and Key Picks
QIAGEN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Boston Scientific (BSX - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Boston Scientific, carrying a Zacks Rank #2, reported a fourth-quarter 2024 adjusted EPS of 55 cents, which beat the Zacks Consensus Estimate by 7.8%. Revenues of $3.73 billion outpaced the Zacks Consensus Estimate by 3.8%.
BSX has a long-term estimated earnings growth rate of 12.7%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 7.4%.
Cardinal Health reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.