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IDEXX Laboratories (IDXX) Earnings, Revenues Rise in Q1
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IDEXX Laboratories, Inc. (IDXX - Free Report) reported first-quarter 2018 earnings per share (EPS) of $1.01, up 31.2% year over year on a reported basis and 32% on a comparable constant exchange rate (CER) basis. The current Zacks Consensus Estimate for adjusted EPS is pegged at 93 cents.
Per the company, the upside in reported EPS was driven by revenue growth, solid operating margin gains and impressive benefits from the U.S. tax reform.
Revenues in Detail
Revenues rose 16.4% year over year (up 12.3% on organic basis) to $537.7 million, surpassing the Zacks Consensus Estimate of $526.2 million by 2.2%.
The upside was driven by strong global gains in Companion Animal Group (“CAG”) Diagnostics recurring revenues, including double-digit organic revenue gains across consumable and reference lab as well as strong acceptance of rapid assays and veterinary software, services and diagnostic imaging systems. Further, steady overall growth contributed to the top line.
IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise
IDEXX derives revenues from four operating segments: CAG; Water; Livestock, Poultry and Dairy (“LPD”); and Other.
In the first quarter, CAG revenues rose 16.8% (up 13.1% organically) year over year to $470.8 million. Water segment’s revenues were up 16.2% from the prior-year quarter (up 11.8% organically) to $29.1 million. LPD revenues grew 10% (up 2% organically) to $32.2 million. Revenues at the Other segment rose 23.6% (up 22.3% organically) to $5.4 million.
Margins
Gross profit increased 17.4% to $303.1 million in the reported quarter. Further, gross margin expanded 50 basis points (bps) to 56.4% despite a 15.1% rise in cost of revenues to $234.6 million.
Sales and marketing expenses rose 14.8% to $100.1 million, while general and administrative expenses increased 15.1% to $60.9 million. Research and development expenses rose 12.4% to $29 million. Operating margin in the quarter improved 100 bps to 21%.
Financial Position
IDEXX exited the first quarter of 2018 with cash and cash equivalents of $159.2 million, compared with $187.7 million at the end of 2017. Net cash provided by operating activities in the reported quarter was $34.9 million, compared with $31.3 million in the year-ago quarter.
2018 Guidance
IDEXX has reaffirmed the 2018 revenue outlook at $2,205-$2,245 million. The company has updated the 2018 revenue organic growth guidance to 10.5-12.5% from the previous 9.5-11.5%. However, IDEXX continues to expect revenue growth of 12-14% on a reported basis. The Zacks Consensus Estimate for 2018 revenues is pegged at $2.22 billion, within the guided range.
Management also raised the EPS guidance to $4.06-$4.20 from the earlier $4.04-$4.18, supported by continued operating margin expansion aligned with its long-term goals. The updated outlook represents EPS growth of 38-43% on a reported basis compared with 37-42% stated previously. The Zacks Consensus Estimate for 2018 adjusted EPS is pegged at $4.11.
Our Take
IDEXX exited the first quarter on a solid note. Moreover, solid year-over year growth in organic revenues and a raised EPS guidance for 2018 are encouraging.
The stellar performance was driven by strong sales at the CAG business. The companion animal market fundamentals remain solid with tremendous global runway for growth. Management’s innovation-based, multi-modality global strategy, enabled by enhanced commercial capability, accelerated recurring CAG Diagnostics revenue growth. Moreover, the strong top-line growth in the quarter was driven by considerable contributions from the rest of the business segments.
Zacks Rank & Other Key Picks
IDEXX has a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corp. (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted EPS of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted EPS of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted EPS of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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IDEXX Laboratories (IDXX) Earnings, Revenues Rise in Q1
IDEXX Laboratories, Inc. (IDXX - Free Report) reported first-quarter 2018 earnings per share (EPS) of $1.01, up 31.2% year over year on a reported basis and 32% on a comparable constant exchange rate (CER) basis. The current Zacks Consensus Estimate for adjusted EPS is pegged at 93 cents.
Per the company, the upside in reported EPS was driven by revenue growth, solid operating margin gains and impressive benefits from the U.S. tax reform.
Revenues in Detail
Revenues rose 16.4% year over year (up 12.3% on organic basis) to $537.7 million, surpassing the Zacks Consensus Estimate of $526.2 million by 2.2%.
The upside was driven by strong global gains in Companion Animal Group (“CAG”) Diagnostics recurring revenues, including double-digit organic revenue gains across consumable and reference lab as well as strong acceptance of rapid assays and veterinary software, services and diagnostic imaging systems. Further, steady overall growth contributed to the top line.
IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise
IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise | IDEXX Laboratories, Inc. Quote
Segmental Analysis
IDEXX derives revenues from four operating segments: CAG; Water; Livestock, Poultry and Dairy (“LPD”); and Other.
In the first quarter, CAG revenues rose 16.8% (up 13.1% organically) year over year to $470.8 million. Water segment’s revenues were up 16.2% from the prior-year quarter (up 11.8% organically) to $29.1 million. LPD revenues grew 10% (up 2% organically) to $32.2 million. Revenues at the Other segment rose 23.6% (up 22.3% organically) to $5.4 million.
Margins
Gross profit increased 17.4% to $303.1 million in the reported quarter. Further, gross margin expanded 50 basis points (bps) to 56.4% despite a 15.1% rise in cost of revenues to $234.6 million.
Sales and marketing expenses rose 14.8% to $100.1 million, while general and administrative expenses increased 15.1% to $60.9 million. Research and development expenses rose 12.4% to $29 million. Operating margin in the quarter improved 100 bps to 21%.
Financial Position
IDEXX exited the first quarter of 2018 with cash and cash equivalents of $159.2 million, compared with $187.7 million at the end of 2017. Net cash provided by operating activities in the reported quarter was $34.9 million, compared with $31.3 million in the year-ago quarter.
2018 Guidance
IDEXX has reaffirmed the 2018 revenue outlook at $2,205-$2,245 million. The company has updated the 2018 revenue organic growth guidance to 10.5-12.5% from the previous 9.5-11.5%. However, IDEXX continues to expect revenue growth of 12-14% on a reported basis. The Zacks Consensus Estimate for 2018 revenues is pegged at $2.22 billion, within the guided range.
Management also raised the EPS guidance to $4.06-$4.20 from the earlier $4.04-$4.18, supported by continued operating margin expansion aligned with its long-term goals. The updated outlook represents EPS growth of 38-43% on a reported basis compared with 37-42% stated previously. The Zacks Consensus Estimate for 2018 adjusted EPS is pegged at $4.11.
Our Take
IDEXX exited the first quarter on a solid note. Moreover, solid year-over year growth in organic revenues and a raised EPS guidance for 2018 are encouraging.
The stellar performance was driven by strong sales at the CAG business. The companion animal market fundamentals remain solid with tremendous global runway for growth. Management’s innovation-based, multi-modality global strategy, enabled by enhanced commercial capability, accelerated recurring CAG Diagnostics revenue growth. Moreover, the strong top-line growth in the quarter was driven by considerable contributions from the rest of the business segments.
Zacks Rank & Other Key Picks
IDEXX has a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corp. (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted EPS of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted EPS of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted EPS of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>