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Luminex (LMNX) Posts Loss in Q4, Revenues Miss Estimates

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Headquartered in Austin, TX, Luminex Corporation () reported loss of 8 cents per share in the fourth quarter of 2016, comparing unfavorably with the Zacks Consensus Estimate of adjusted earnings of 4 cents per share. In fact, earnings declined almost 117% on a year-over-year basis.

However, revenues increased almost 19.6% year over year to $72.3 million, marginally ahead of the Zacks Consensus Estimate of $71 million. The year-over-year upside in revenues may be attributed to impressive systems sales, strong contribution from Nanosphere, strength in the Assay product portfolio and robust consumable sales.

For the full year, Luminex reported revenues of $270.6 million, up 13.9% on a year-over-year basis. Furthermore, the company reported earnings of 93 cents per share in 2016.

 

Meanwhile, the Zacks Rank #3 (Hold) stock has a long-term expected earnings growth rate of 16.25%.

Quarter Highlights

Luminex is focused on fortifying its market leadership in infectious diseases with its flagship platform –– the ARIES system. The company is making noteworthy progress with the ARIES system, which represents a major revenue opportunity for the stock. Per management, Luminex is the only company that provides solutions to both targeted and syndromic testing in a lab.

In the quarter, Luminex received an approval from the U.S. FDA for the ARIES Group B Strep assay (read more: Luminex Gets FDA Clearance for ARIES GBS Assay).

Luminex is well poised on the acquisition of Nanosphere -- a well known company in the healthcare economics space with a strong clientele engaged in the development of molecular diagnostic tools. Notably, Nanosphere contributed revenues of $9.5 million, up 39% on a year-over-year basis.

In the just reported quarter, Luminex announced that its ARIES System was awarded the R&D 100 Award at the 54th Annual R&D 100 Awards ceremony in Nov 2016. The award was presented by the R&D Magazine, following an international competition that honors the 100 best technologies of the year (read more: Luminex Awarded R&D 100 for ARIES Systems in November).

Quarter in Details

System sales jumped 12.4% on a year-over-year basis to $9.6 million. Notably, the company shipped 72 multiplexing analyzers in the reported quarter that led to higher system revenues. Here we note that system sales included the placement of the ARIES MAGPIX systems, LX systems, FLEXMAP 3D systems and Verigene System platforms as well.

Assay revenues grew 36.5% year over year. Sales of the infectious disease assay were approximately 78% of total assay sales in the quarter while genetic testing assays contributed 22%.

Luminex Corporation Price and EPS Surprise

 

Luminex Corporation Price and EPS Surprise | Luminex Corporation Quote

Coming to royalty revenues, sales at this segment increased roughly 7% on a year-over-year basis to approximately $10.2 million.

Consumables sales rose 5.1% to $11.1 million, primarily attributable to strong demand across the partner base of the company.

Margins

Adjusted gross margin was 61.2% in the reported quarter, compared to 71.8% a year ago. Per management, the contraction in gross margin can be majorly attributed to the acquisition of Nanosphere.

Coming to operating expenses along with the Nanosphere deal and related costs, expenses soared a massive 32% on a year-over-year basis. However, excluding Nanosphere, operating expenses climbed 7% from the year-ago quarter.

Financial Condition

The company ended the fourth quarter with approximately $93 million in cash and investments.

Guidance

Luminex reiterated its 2017 annual revenue guidance at the band of $295 million to $305 million.

The company projects first-quarter 2017 revenues in the range of $73 million to $75 million.

Stocks to Consider

Better-ranked stocks in the broader medical sector include Addus Glaukos Corporation (GKOS - Free Report) , Avinger, Inc. (AVGR - Free Report) and Dextera Surgical Inc. . Notably, Glaukos sports a Zacks Rank #1 (Strong Buy) while Avinger and Dextera Surgical carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 196.8%.

Avinger projects sales growth of 2.3% for the current year. Additionally, the company posted a positive earnings surprise of 27% in the last quarter.

Dextera Surgical has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-month return of 46.4%.

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