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Luminex (LMNX) Reports Q2 Loss, Beats Revenue Estimates

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Luminex Corporation reported second-quarter 2019 loss of 10 cents per share (EPS), against the Zacks Consensus Estimate of a break even. Notably, the company reported earnings of 15 cents per share in the year-ago quarter.

Revenues in Detail

Revenues came in at $83.1 million, beating the Zacks Consensus Estimate by 1.7%. On a year-over-year basis, the top line improved 4.9%.

Total sample-to-answer franchise revenues grew 29% from the prior-year quarter.

Luminex Corporation Price, Consensus and EPS Surprise

 

Luminex Corporation Price, Consensus and EPS Surprise

Luminex Corporation price-consensus-eps-surprise-chart | Luminex Corporation Quote

Segmental Analysis

System Sales

Revenues at this segment totaled $18.6 million, surging 57.3% from the year-ago quarter.

Consumable Sales

This segment accounted for $12.7 million of revenues, up 16.1% year over year.

Royalty Revenues

Royalty revenues totaled $12.8 million, up 11% on a year-over-year basis.

Assay Revenues

This segment reported revenues worth $31.4 million, down 21.9% on a year-over-year basis.

Service Revenues

Revenues in the segment grossed $6 million, up 97.9% from the year-ago quarter.

Other

Other revenues came in at $1.5 million, down 25.3% from a year ago.

Business Details

Per management, this Texas-based company placed 48 sample-to-answer molecular systems under contract during the second quarter. Active sample-to-answer customers totaled 640 in the quarter under review.

Financial Update

As of Jun 30, 2019, cash and cash equivalents totaled $63.3 million, down 17.2% from 2018-end level.

Cash flow from operating activities for the three months ended Jun 30, 2019, came in at $5.8 million, down 66.4% from the year-ago quarter.

Margins

Gross profit in the reported quarter was $45.2 million, down 8.3% year over year. Gross margin was 54.5%, contracting 740 bps.

Research and development expenses grossed $14.9 million, up 28.4% year over year. Selling, general and administrative expenses in the second quarter were $33.1 million, up 20.1% year over year. Total operating expenses amounted to $50.9 million, up 23% from the year-ago reported figure.

The company incurred operating loss of $5.8 million, against the year-ago quarter’s operating income of $7.9 million.

Guidance

For the third quarter of 2019, the company anticipates revenues between $80 million and $83 million. The mid-point of the latest guidance of $81.5 million lies below the Zacks Consensus Estimate of $82.9 million.

Notably, the company reiterated 2019 revenue outlook, which is estimated in the band of $337-$343 million. The mid-point of the latest guidance of $340 million is slightly below the Zacks Consensus Estimate of $340.5 million.

In Conclusion

Luminex exited the second quarter on a mixed note. The company continues to gain from its flagship ARIES and VERIGENE platforms that currently have a strong customer base. Revenues at System sales, Consumable Sales and Royalty revenues also improved significantly. Management remains optimistic about the acquisition of the flow cytometry asset of MilliporeSigma. Robust guidance for the third quarter of 2019 raises optimism in the stock.

Meanwhile, the company’s assay and other revenues declined in the reported quarter. Contraction in gross margin add to woes.

Zacks Rank

Currently, Luminex carries a Zacks Rank #5 (Strong Sell).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks which reported solid results this earning season are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Stryker delivered second-quarter 2019 adjusted earnings per share of $1.98, beating the Zacks Consensus Estimate by 2.6%. Revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Baxter delivered second-quarter 2019 adjusted earnings of 89 cents per share, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion outpaced the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company carries a Zacks Rank #2.

Intuitive Surgical reported second-quarter 2019 adjusted earnings per share of $3.25, which beat the Zacks Consensus Estimate of $2.85. Revenues were $1.1 billion, surpassing the Zacks Consensus Estimate of $1.03 billion. The company sports a Zacks Rank #1.

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