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QIAGEN N.V.’s (QGEN - Free Report) second-quarter 2024 adjusted earnings per share (EPS) were 55 cents, the same at the constant exchange rate (CER). The reported figure increased 7.8% from the 2023 comparable figure and topped the Zacks Consensus Estimate by 5.8%.
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.
On a GAAP basis, the loss in the second quarter was 83 cents per share compared to the EPS of 35 cents in the year-ago period.
Revenues in Detail
Quarterly net sales were up 0.3% year over year to $496.3 million (up 1% at CER). The top line beat the Zacks Consensus Estimate by 0.5%. Sales at CER were $502 million, ahead of the outlook of at least $495 million.
Geographical Revenue Analysis
Sales from the Americas (52.7% of sales) totaled $262 million compared with $263 million in the prior-year period. Our model projected $256.6 million for this region in the second quarter.
Revenues from Europe, the Middle East and Africa (32%) were up 5% on a reported basis and 7% at CER to $159 million. Our model’s projection was $158.3 million.
Revenues from Asia-Pacific/Japan (15.3%) fell 7% year over year on a reported basis (down 3% at CER) to $76 million. Our model forecast was $79 million.
As of the second quarter of 2024, QIAGEN had two major customer classes — Molecular Diagnostics and Life Sciences.
Molecular Diagnostics (representing 53.6% of net sales) revenues were up 3% on a reported basis (up 4% at CER) to $266 million. Our model projected $262 million for this segment.
Life Sciences (46.4%) reported revenues of $230 million, down 2% on a reported basis and 1% at CER). This compares to our model forecast of $231.9 million.
Operational Update
In the second quarter, the company’s cost of sales (excluding the amortization of acquisition-related intangibles) surged 167.9%. The adjusted gross profit fell 0.5% year over year to $316.1 million. Meanwhile, the adjusted gross margin contracted 462 basis points (bps) to 63.7%.
Sales and marketing expenses fell 1.4% year over year to $114.7 million. R&D expenses of $49.1 million were down 1.6% year over year. G&A expenses declined 2% year over year to $29 million.
Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring, integration and others) increased 1.3% year over year to $124 million. Meanwhile, the adjusted operating margin contracted 135 bps to 24.9%.
Financial Update
QIAGEN exited the second quarter of 2024 with cash, cash equivalents and short-term investments of $890.2 million compared with $893.1 million at the end of the first quarter.
The long-term debt (net of the current portion) was $908.9 million at the end of the second quarter of 2024 compared with $912.8 million at the end of the first quarter.
The cumulative net cash provided by operating activities at the end of the second quarter of 2024 was $299.7 million compared with $183.4 million in the year-ago period.
Guidance
QIAGEN provided an updated financial outlook for 2024.
Full-year net sales are expected to be at least $1.985 billion CER (previously at least $2.0 billion CER). Consumables and related revenues are expected to drive growth, while larger-scale instrument sales remain challenging. The Zacks Consensus Estimate for revenues is pegged at $1.98 billion.
The adjusted EPS is expected to be at least $2.16 at CER (earlier $2.14 CER). The Zacks Consensus Estimate is pegged at $2.12.
The company also provided a third-quarter 2024 outlook.
QGEN estimates net sales of at least $495 million at CER compared with $476 million in the third quarter of 2023. The Zacks Consensus Estimate is pegged at $498.7 million.
The adjusted EPS is expected to be at least 55 cents at CER compared to 50 cents in the third quarter of 2023. The Zacks Consensus Estimate is pegged at 54 cents.
Our Take
QIAGEN delivered better-than-expected earnings and revenues in the second quarter of 2024. CER sales growth in the quarter was driven by increased year-over-year CER sales in the Sample technologies, Diagnostic solutions and PCR product groups. A key driver of the improving trend in consumables was solid gains in automated kits used on QIAGEN's instrument portfolio, which is going through an upgrade cycle, including QIAcube Connect and EZ2 Connect.
In addition, QIAGEN’s upbeat guidance is based on the solid core business performance in the first half of the year and the decision to phase out the NeuMoDx clinical PCR system. The company is bolstering its portfolio with new product launches, particularly for QIAstat-Dx with the FDA’s 510(k) clearances of the new gastrointestinal panel and the updated respiratory panel.
Meanwhile, Instrument sales posted a decline amid ongoing cautious customer capital spending and overshadowed good placement trends under multi-year reagent rental agreements. The contraction of both margins in the quarter is discouraging as well.
Zacks Rank and Other Key Picks
QIAGEN currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgicalreported a third-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgicalhas an estimated long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 8.97%.
Abbott, carrying a Zacks Rank #2, reported third-quarter 2024 earnings of $1.14, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2, reported a third-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 3.31%.
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QIAGEN (QGEN) Q2 Earnings Surpass Estimates, Margins Crash
QIAGEN N.V.’s (QGEN - Free Report) second-quarter 2024 adjusted earnings per share (EPS) were 55 cents, the same at the constant exchange rate (CER). The reported figure increased 7.8% from the 2023 comparable figure and topped the Zacks Consensus Estimate by 5.8%.
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.
On a GAAP basis, the loss in the second quarter was 83 cents per share compared to the EPS of 35 cents in the year-ago period.
Revenues in Detail
Quarterly net sales were up 0.3% year over year to $496.3 million (up 1% at CER). The top line beat the Zacks Consensus Estimate by 0.5%. Sales at CER were $502 million, ahead of the outlook of at least $495 million.
Geographical Revenue Analysis
Sales from the Americas (52.7% of sales) totaled $262 million compared with $263 million in the prior-year period. Our model projected $256.6 million for this region in the second quarter.
Revenues from Europe, the Middle East and Africa (32%) were up 5% on a reported basis and 7% at CER to $159 million. Our model’s projection was $158.3 million.
Revenues from Asia-Pacific/Japan (15.3%) fell 7% year over year on a reported basis (down 3% at CER) to $76 million. Our model forecast was $79 million.
QIAGEN N.V. Price, Consensus and EPS Surprise
QIAGEN N.V. price-consensus-eps-surprise-chart | QIAGEN N.V. Quote
Segmental Details
As of the second quarter of 2024, QIAGEN had two major customer classes — Molecular Diagnostics and Life Sciences.
Molecular Diagnostics (representing 53.6% of net sales) revenues were up 3% on a reported basis (up 4% at CER) to $266 million. Our model projected $262 million for this segment.
Life Sciences (46.4%) reported revenues of $230 million, down 2% on a reported basis and 1% at CER). This compares to our model forecast of $231.9 million.
Operational Update
In the second quarter, the company’s cost of sales (excluding the amortization of acquisition-related intangibles) surged 167.9%. The adjusted gross profit fell 0.5% year over year to $316.1 million. Meanwhile, the adjusted gross margin contracted 462 basis points (bps) to 63.7%.
Sales and marketing expenses fell 1.4% year over year to $114.7 million. R&D expenses of $49.1 million were down 1.6% year over year. G&A expenses declined 2% year over year to $29 million.
Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring, integration and others) increased 1.3% year over year to $124 million. Meanwhile, the adjusted operating margin contracted 135 bps to 24.9%.
Financial Update
QIAGEN exited the second quarter of 2024 with cash, cash equivalents and short-term investments of $890.2 million compared with $893.1 million at the end of the first quarter.
The long-term debt (net of the current portion) was $908.9 million at the end of the second quarter of 2024 compared with $912.8 million at the end of the first quarter.
The cumulative net cash provided by operating activities at the end of the second quarter of 2024 was $299.7 million compared with $183.4 million in the year-ago period.
Guidance
QIAGEN provided an updated financial outlook for 2024.
Full-year net sales are expected to be at least $1.985 billion CER (previously at least $2.0 billion CER). Consumables and related revenues are expected to drive growth, while larger-scale instrument sales remain challenging. The Zacks Consensus Estimate for revenues is pegged at $1.98 billion.
The adjusted EPS is expected to be at least $2.16 at CER (earlier $2.14 CER). The Zacks Consensus Estimate is pegged at $2.12.
The company also provided a third-quarter 2024 outlook.
QGEN estimates net sales of at least $495 million at CER compared with $476 million in the third quarter of 2023. The Zacks Consensus Estimate is pegged at $498.7 million.
The adjusted EPS is expected to be at least 55 cents at CER compared to 50 cents in the third quarter of 2023. The Zacks Consensus Estimate is pegged at 54 cents.
Our Take
QIAGEN delivered better-than-expected earnings and revenues in the second quarter of 2024. CER sales growth in the quarter was driven by increased year-over-year CER sales in the Sample technologies, Diagnostic solutions and PCR product groups. A key driver of the improving trend in consumables was solid gains in automated kits used on QIAGEN's instrument portfolio, which is going through an upgrade cycle, including QIAcube Connect and EZ2 Connect.
In addition, QIAGEN’s upbeat guidance is based on the solid core business performance in the first half of the year and the decision to phase out the NeuMoDx clinical PCR system. The company is bolstering its portfolio with new product launches, particularly for QIAstat-Dx with the FDA’s 510(k) clearances of the new gastrointestinal panel and the updated respiratory panel.
Meanwhile, Instrument sales posted a decline amid ongoing cautious customer capital spending and overshadowed good placement trends under multi-year reagent rental agreements. The contraction of both margins in the quarter is discouraging as well.
Zacks Rank and Other Key Picks
QIAGEN currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgicalreported a third-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgicalhas an estimated long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 8.97%.
Abbott, carrying a Zacks Rank #2, reported third-quarter 2024 earnings of $1.14, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2, reported a third-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 3.31%.