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Haemonetics (HAE) Q1 Earnings Miss Estimates, Gross Margin Rises
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Haemonetics Corporation (HAE - Free Report) delivered adjusted earnings per share (EPS) of $1.02 in the first quarter of fiscal 2025, down 2.9% year over year. The bottom line missed the Zacks Consensus Estimate by 0.9%.
On a GAAP basis, the EPS was 74 cents compared with 80 cents in the prior-year quarter.
Total Revenues
Revenues increased 8% (up 2.8% on an organic basis) to $336.2 million in the first quarter of fiscal 2025. The top line beat the Zacks Consensus Estimate by 0.1%.
Segments in Detail
At Plasma, revenues of $135.9 million (accounting for 40.4% of the total revenues) were down 2.7% year over year (down 2.6% on an organic basis) in the reported quarter. Our model projected the unit’s revenues to be $131.8 million.
The decrease resulted from lower sales volumes in North America relating to a previously announced customer transition and a temporary plasma center outage at one of the company’s customers.
Haemonetics Corporation Price, Consensus and EPS Surprise
Revenues at Blood Center (19.7%) fell 4.3% (down 2.1% on an organic basis) to $66.2 million. Our model forecast stood at $63.5 million. The downside was primarily due to declines in the Whole Blood business.
Hospital revenues (39.9%) rose 30.7% (up 13.5% on an organic basis) to $134 million. Our model projected $137.9 million in revenues for this segment. The revenue increase was led by product lines within the Interventional Technologies franchise and the benefits of Sensor Guided Technologies and Esophageal Protection that were recently acquired. Growth in the Vascular Closure business also contributed.
Margins
In the first quarter of fiscal 2025, the company-adjusted gross margin was 55.3%, up 110 basis points (bps) year over year. This was driven by volume and mix with a disproportionate contribution from the growing momentum in the Hospital business unit.
Company-adjusted operating expenses, as a percentage of revenues, were 34.2% in the first quarter of fiscal 2025 compared with 31.7% in the prior-year period.
The increase in adjusted operating expenses as a percentage of revenues was primarily driven by costs associated with the operations of recent acquisitions and an increased headcount.
The company-adjusted operating income was $71 million in the quarter under discussion, up 1.1% year over year. The adjusted operating margin was 21.1%, down 150 bps from the year-ago quarter’s levels.
Financial Position
Haemonetics exited the first quarter of fiscal 2025 with cash and cash equivalents of $344.4 million compared with $178.8 million at the end of fiscal 2024. Long-term debt was $1.22 billion, up from $797.6 million at the end of fiscal 2024.
The cumulative net cash outflow from operating activities at the end of the first quarter of fiscal 2025 was $27.4 million compared to the cash inflow of $19.1 million in the year-ago period.
2025 Guidance
Haemonetics reaffirmed its guidance for full-fiscal 2025.
The company expects fiscal 2025 GAAP revenue growth in the range of 5-8% on a reported basis (same as earlier). Organic revenue growth, too, is anticipated in the range of 0-3% (unchanged). The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $1.39 billion.
HAE expects full-year 2025 adjusted EPS in the band of $4.45-$4.75 (unchanged). The Zacks Consensus Estimate for the same is pegged at $4.58.
Our Take
Haemonetics’ earnings missed estimates in the first quarter of fiscal 2025. However, revenues beat the same. The bottom line was also down year over year. Whole Blood revenues saw a decline as the company continued to rationalize the franchise to optimize durable contribution as part of the organization-wide margin expansion. A contraction in the adjusted operating margin in the quarter is discouraging.
On a positive note, the performance reflected strength in the breadth of the company’s diverse product portfolio, its capacity for continued innovation and growth and the resilience of its business to succeed in dynamic markets amid the ongoing geopolitical challenges.
Haemonetics advanced the delivery of plasmapheresis technologies proven to safely lower the cost of collection, strengthening its position in meeting the industry’s most critical needs. Also, the limited market release of VASCADE MVP XL was a success, with very positive results across procedures and highly encouraging responses from early adopters.
Zacks Rank & Other Key Picks
Haemonetics currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , DaVita Inc. (DVA - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported 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 Surgical has 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%.
DaVita, carrying a Zacks Rank #2, reported second-quarter 2024 adjusted earnings of $2.59, which surpassed the Zacks Consensus Estimate by 4.9%. Revenues of $3.19 billion topped the Zacks Consensus Estimate by 0.7%.
DVA has an estimated long-term earnings growth rate of 17.5% compared with the S&P 500’s 12.5%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 24.2%.
Quest Diagnostics, carrying a Zacks Rank #2, reported a third-quarter adjusted EPS of $2.35, which beat 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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Haemonetics (HAE) Q1 Earnings Miss Estimates, Gross Margin Rises
Haemonetics Corporation (HAE - Free Report) delivered adjusted earnings per share (EPS) of $1.02 in the first quarter of fiscal 2025, down 2.9% year over year. The bottom line missed the Zacks Consensus Estimate by 0.9%.
On a GAAP basis, the EPS was 74 cents compared with 80 cents in the prior-year quarter.
Total Revenues
Revenues increased 8% (up 2.8% on an organic basis) to $336.2 million in the first quarter of fiscal 2025. The top line beat the Zacks Consensus Estimate by 0.1%.
Segments in Detail
At Plasma, revenues of $135.9 million (accounting for 40.4% of the total revenues) were down 2.7% year over year (down 2.6% on an organic basis) in the reported quarter. Our model projected the unit’s revenues to be $131.8 million.
The decrease resulted from lower sales volumes in North America relating to a previously announced customer transition and a temporary plasma center outage at one of the company’s customers.
Haemonetics Corporation Price, Consensus and EPS Surprise
Haemonetics Corporation price-consensus-eps-surprise-chart | Haemonetics Corporation Quote
Revenues at Blood Center (19.7%) fell 4.3% (down 2.1% on an organic basis) to $66.2 million. Our model forecast stood at $63.5 million. The downside was primarily due to declines in the Whole Blood business.
Hospital revenues (39.9%) rose 30.7% (up 13.5% on an organic basis) to $134 million. Our model projected $137.9 million in revenues for this segment. The revenue increase was led by product lines within the Interventional Technologies franchise and the benefits of Sensor Guided Technologies and Esophageal Protection that were recently acquired. Growth in the Vascular Closure business also contributed.
Margins
In the first quarter of fiscal 2025, the company-adjusted gross margin was 55.3%, up 110 basis points (bps) year over year. This was driven by volume and mix with a disproportionate contribution from the growing momentum in the Hospital business unit.
Company-adjusted operating expenses, as a percentage of revenues, were 34.2% in the first quarter of fiscal 2025 compared with 31.7% in the prior-year period.
The increase in adjusted operating expenses as a percentage of revenues was primarily driven by costs associated with the operations of recent acquisitions and an increased headcount.
The company-adjusted operating income was $71 million in the quarter under discussion, up 1.1% year over year. The adjusted operating margin was 21.1%, down 150 bps from the year-ago quarter’s levels.
Financial Position
Haemonetics exited the first quarter of fiscal 2025 with cash and cash equivalents of $344.4 million compared with $178.8 million at the end of fiscal 2024. Long-term debt was $1.22 billion, up from $797.6 million at the end of fiscal 2024.
The cumulative net cash outflow from operating activities at the end of the first quarter of fiscal 2025 was $27.4 million compared to the cash inflow of $19.1 million in the year-ago period.
2025 Guidance
Haemonetics reaffirmed its guidance for full-fiscal 2025.
The company expects fiscal 2025 GAAP revenue growth in the range of 5-8% on a reported basis (same as earlier). Organic revenue growth, too, is anticipated in the range of 0-3% (unchanged). The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $1.39 billion.
HAE expects full-year 2025 adjusted EPS in the band of $4.45-$4.75 (unchanged). The Zacks Consensus Estimate for the same is pegged at $4.58.
Our Take
Haemonetics’ earnings missed estimates in the first quarter of fiscal 2025. However, revenues beat the same. The bottom line was also down year over year. Whole Blood revenues saw a decline as the company continued to rationalize the franchise to optimize durable contribution as part of the organization-wide margin expansion. A contraction in the adjusted operating margin in the quarter is discouraging.
On a positive note, the performance reflected strength in the breadth of the company’s diverse product portfolio, its capacity for continued innovation and growth and the resilience of its business to succeed in dynamic markets amid the ongoing geopolitical challenges.
Haemonetics advanced the delivery of plasmapheresis technologies proven to safely lower the cost of collection, strengthening its position in meeting the industry’s most critical needs. Also, the limited market release of VASCADE MVP XL was a success, with very positive results across procedures and highly encouraging responses from early adopters.
Zacks Rank & Other Key Picks
Haemonetics currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , DaVita Inc. (DVA - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported 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 Surgical has 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%.
DaVita, carrying a Zacks Rank #2, reported second-quarter 2024 adjusted earnings of $2.59, which surpassed the Zacks Consensus Estimate by 4.9%. Revenues of $3.19 billion topped the Zacks Consensus Estimate by 0.7%.
DVA has an estimated long-term earnings growth rate of 17.5% compared with the S&P 500’s 12.5%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 24.2%.
Quest Diagnostics, carrying a Zacks Rank #2, reported a third-quarter adjusted EPS of $2.35, which beat 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%.