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QuidelOrtho (QDEL) Q2 Earnings Beat Estimates, U.S. Sales Down
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QuidelOrtho Corporation (QDEL - Free Report) reported an adjusted loss per share of 7 cents in the second quarter of 2024 against earnings per share (EPS) of 26 cents in the year-ago period. However, the figure beat the Zacks Consensus Estimate by 66.7%.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
GAAP loss per share in the quarter was $2.20 compared with 80 cents in the year-ago quarter.
Revenues in Detail
QuidelOrtho registered revenues of $637 million in the second quarter, which decreased 4.2% year over year on a reported basis and 3.3% at a constant exchange rate (CER). However, the figure beat the Zacks Consensus Estimate by 3.2%.
In the second quarter, QuidelOrtho’s total recurring revenues, excluding COVID-19-related revenues, instrument revenues and U.S. Donor screening revenues, were $550.8 million (up 3.5% on a reported basis and 4.6% at CER). The company defines recurring revenue as revenues from sales of assays, reagents, consumables and services and excludes instruments.
In the second quarter, Respiratory revenues were $58 million (down 34.8%, both on a reported basis and at CER). Excluding COVID-19 revenues, respiratory revenues grew 18% in second-quarter 2024.
Non-Respiratory revenues were $579 million (up 0.5% on a reported basis and 1.6% at 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 second quarter, Labs revenues were $354.2 million, down 2% and 1% on a reported basis and at CER, respectively.
TM revenues were $161.3 million in the second quarter, down 1.2% on a reported basis but up 0.5% at CER.
POC revenues amounted to $117.1 million in the second quarter, reflecting a decline of 12.7% and 12.8% on a reported basis and at CER, respectively.
MDx revenues totaled $4.4 million in the second quarter, down 29% on a reported basis and 29.4% at CER.
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 $350.1 million, reflecting a decline of 7.6% and 7.7% on a reported basis and at CER, respectively.
EMEA revenues amounted to $81.1 million, reflecting an uptick of 0.6% and 1% on a reported basis and at CER, respectively.
Revenues from China amounted to $81.6 million, reflecting an improvement of 0.4% on a reported basis and 4.1% at CER.
Revenues from Other regions amounted to $124.2 million, reflecting a decline of 0.2% on a reported basis and growth of 2.9% at CER.
Margin Trend
In the quarter under review, QuidelOrtho’s adjusted gross profit declined 7.2% to $281.5 million. The adjusted gross margin contracted 140 basis points (bps) to 44.2%.
Selling, marketing and administrative expenses increased 5.1% to $188.2 million. Research and development expenses declined 9.8% year over year to $56.3 million. Adjusted operating expenses were approximately flat year over year, however, the metric increased 200 bps as a percentage of revenue.
Operating loss totaled $117.5 million compared with $26.9 million in the prior-year quarter.
Financial Position
QuidelOrtho exited second-quarter 2024 with cash and cash equivalents of $107 million compared with $78.5 million at the end of the first quarter. Total debt (including short-term debt) at the end of second-quarter 2024 was $2.56 billion compared with $2.40 billion at the first-quarter end.
Cumulative net cash used for operating activities at the end of second-quarter 2024 was $98.6 million against net cash provided of $158.3 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. However, the company expects its revenues and adjusted EPS to be at or slightly below the low end of its previously announced guidance during the fourth-quarter earnings call. Revenues and adjusted EPS are expected to be in the range of $2.76 billion-$3.07 billion and $2.40-3.07 per share, respectively.
The company expects its topline, excluding COVID-19 and U.S. Donor Screening revenues, to reflect mid-single-digit growth in 2025.
Our Take
QuidelOrtho’s earnings and revenues beat the Zacks Consensus Estimate in the second quarter of 2024. Excluding COVID-19 revenue impact, the company witnessed growth in total revenues. 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, revenue decline in the North American region was discouraging.
QuidelOrtho Corporation Price, Consensus and EPS Surprise
QuidelOrtho currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank of 2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.
Hologic, carrying a Zacks Rank of 2 at present, has a long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.50%.
Hologic reported second-quarter 2024 adjusted EPS of $1.06, which beat the Zacks Consensus Estimate by 3.9%. Revenues of $1 billion surpassed the Zacks Consensus Estimate by 1.1%.
Universal Health Services reported second-quarter 2024 adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. Revenues of $3.9 billion surpassed the Zacks Consensus Estimate by 1.5%. It currently sports a Zacks Rank of 1.
Universal Health Services has a long-term growth rate of 18%. UHS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.
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QuidelOrtho (QDEL) Q2 Earnings Beat Estimates, U.S. Sales Down
QuidelOrtho Corporation (QDEL - Free Report) reported an adjusted loss per share of 7 cents in the second quarter of 2024 against earnings per share (EPS) of 26 cents in the year-ago period. However, the figure beat the Zacks Consensus Estimate by 66.7%.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
GAAP loss per share in the quarter was $2.20 compared with 80 cents in the year-ago quarter.
Revenues in Detail
QuidelOrtho registered revenues of $637 million in the second quarter, which decreased 4.2% year over year on a reported basis and 3.3% at a constant exchange rate (CER). However, the figure beat the Zacks Consensus Estimate by 3.2%.
In the second quarter, QuidelOrtho’s total recurring revenues, excluding COVID-19-related revenues, instrument revenues and U.S. Donor screening revenues, were $550.8 million (up 3.5% on a reported basis and 4.6% at CER). The company defines recurring revenue as revenues from sales of assays, reagents, consumables and services and excludes instruments.
In the second quarter, Respiratory revenues were $58 million (down 34.8%, both on a reported basis and at CER). Excluding COVID-19 revenues, respiratory revenues grew 18% in second-quarter 2024.
Non-Respiratory revenues were $579 million (up 0.5% on a reported basis and 1.6% at 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 second quarter, Labs revenues were $354.2 million, down 2% and 1% on a reported basis and at CER, respectively.
TM revenues were $161.3 million in the second quarter, down 1.2% on a reported basis but up 0.5% at CER.
POC revenues amounted to $117.1 million in the second quarter, reflecting a decline of 12.7% and 12.8% on a reported basis and at CER, respectively.
MDx revenues totaled $4.4 million in the second quarter, down 29% on a reported basis and 29.4% at CER.
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 $350.1 million, reflecting a decline of 7.6% and 7.7% on a reported basis and at CER, respectively.
EMEA revenues amounted to $81.1 million, reflecting an uptick of 0.6% and 1% on a reported basis and at CER, respectively.
Revenues from China amounted to $81.6 million, reflecting an improvement of 0.4% on a reported basis and 4.1% at CER.
Revenues from Other regions amounted to $124.2 million, reflecting a decline of 0.2% on a reported basis and growth of 2.9% at CER.
Margin Trend
In the quarter under review, QuidelOrtho’s adjusted gross profit declined 7.2% to $281.5 million. The adjusted gross margin contracted 140 basis points (bps) to 44.2%.
Selling, marketing and administrative expenses increased 5.1% to $188.2 million. Research and development expenses declined 9.8% year over year to $56.3 million. Adjusted operating expenses were approximately flat year over year, however, the metric increased 200 bps as a percentage of revenue.
Operating loss totaled $117.5 million compared with $26.9 million in the prior-year quarter.
Financial Position
QuidelOrtho exited second-quarter 2024 with cash and cash equivalents of $107 million compared with $78.5 million at the end of the first quarter. Total debt (including short-term debt) at the end of second-quarter 2024 was $2.56 billion compared with $2.40 billion at the first-quarter end.
Cumulative net cash used for operating activities at the end of second-quarter 2024 was $98.6 million against net cash provided of $158.3 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. However, the company expects its revenues and adjusted EPS to be at or slightly below the low end of its previously announced guidance during the fourth-quarter earnings call. Revenues and adjusted EPS are expected to be in the range of $2.76 billion-$3.07 billion and $2.40-3.07 per share, respectively.
The company expects its topline, excluding COVID-19 and U.S. Donor Screening revenues, to reflect mid-single-digit growth in 2025.
Our Take
QuidelOrtho’s earnings and revenues beat the Zacks Consensus Estimate in the second quarter of 2024. Excluding COVID-19 revenue impact, the company witnessed growth in total revenues. 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, revenue decline in the North American region was discouraging.
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 #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank of 2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.
Hologic, carrying a Zacks Rank of 2 at present, has a long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.50%.
Hologic reported second-quarter 2024 adjusted EPS of $1.06, which beat the Zacks Consensus Estimate by 3.9%. Revenues of $1 billion surpassed the Zacks Consensus Estimate by 1.1%.
Universal Health Services reported second-quarter 2024 adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. Revenues of $3.9 billion surpassed the Zacks Consensus Estimate by 1.5%. It currently sports a Zacks Rank of 1.
Universal Health Services has a long-term growth rate of 18%. UHS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.