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QIAGEN (QGEN) Q1 Earnings Lag Estimates, Operating Margin Up
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QIAGEN N.V.’s (QGEN - Free Report) first-quarter 2020 adjusted earnings per share (EPS) were 34 cents, up 25.9% year over year (up 25.9% at constant exchange rate or CER as well). However, the figure lagged the Zacks Consensus Estimate by a penny.
The adjustment excludes the impact of certain non-recurring items like Business integration, acquisition and restructuring related expenses and amortization expenses, among others.
Reported EPS for the quarter was 17 cents per share, up 30.8% year over year.
Revenues in Detail
Net sales at actual rates in the first quarter rose 6.7% on a year-over-year basis to $372.1 million (up 9% at CER). Also, the top line beat the Zacks Consensus Estimate by 14.5%.
Robust sales were recorded on significant demand for solutions used in the COVID-19 pandemic. However, there were weaker customer demand trends in other areas of the portfolio.
In the quarter under review, sales from the Americas (47% of revenues) totaled $174 million, up 2% on a reported basis (up 3% at CER).
Revenues from Europe-Middle East-Africa (34% of revenues) rose 17% reportedly (up 22% at CER) to $128 million.
Further, revenues from Asia-Pacific/Japan (19% of revenues) rose 1% year over year on a reported basis (up 3% at CER) to $69 million.
Segmental Details
As of the first quarter of 2020, QIAGEN has two major customer classes which are Molecular Diagnostics (that includes human healthcare including Precision Medicine and companion diagnostics) and Life Sciences (that includes Pharma and Academia/Applied Testing).
Molecular Diagnostics (representing 47% of net sales) revenues were up 4% on a reported basis (up 7% at CER) to $176 million.
Life Sciences (53% of total revenues) reported revenues of $196 million, up 9% on a reported basis (up 10% at CER).
Sales derived from Applied Testing/Academia rose 13% on a reported basis (up 14% at CER) to $123 million. Pharma sales climbed 3% on a reported basis (up 4% at CER) in the first quarter to $73 million.
Operational Update
Adjusted gross profit in the quarter under review rose 6.7% to $258.7 million. Despite that, gross margin remained marginally unchanged at 69.51% on a 6.7% rise in adjusted cost of revenues (adjusting for acquisition-related intangible amortization) to $113.4 million.
Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring and integration, asset impairment) rose 29.7% year over year to $99.9 million in the first quarter. Adjusted operating margin expanded 476 bps to 26.8%.
Financial Update
QIAGEN exited the first quarter of 2020 with cash and cash equivalents of $656.8 million, up from $623.6 million at the end of 2019.
At the end of the first quarter of 2020, net cash flow from operating activities was $15.9 million compared with $44.7 million a year ago. Moreover, the company reported free cash outflow of $4.1 million at the end of the first quarter against free cash inflow of $21.3 million a year ago.
Guidance
QIAGEN currently anticipates net sales growth of at least 12% year over year at CER and adjusted EPS of at least 40 cents at CER for the second quarter of 2020.
In the second quarter of 2020, the company expects to witness sales growth primarily on the ongoing significant demand for various products and solutions used in coronavirus pandemic testing. This is likely to more than offset lower sales in other areas of the portfolio affected by widespread quarantine and lockdown actions worldwide. QIAGEN also anticipates an adverse currency impact of about 2- 3% on net sales growth at actual rates and an adverse impact of up to about a penny on adjusted EPS.
QIAGEN is, however, currently not in a position to quantify the actual impact of the coronavirus pandemic, even though it expects the growth momentum of the first half of 2020 to continue through the year. Accordingly, it has suspended the full-year financial guidance for now.
Our Take
QIAGEN exited the first quarter of 2020 with better-than-expected revenues. It registered revenue growth across all geographies and each of its operating segments in the first quarter. Instrument sales recorded robust demand for the QIAsymphony automation system, the QIAcube Connect sample processing instrument and the QIAstat-Dx syndromic testing instrument. Expansion in operating margin is encouraging as well.
QIAGEN’s efforts to combat the coronavirus pandemic are noteworthy. It has ramped up production capacity for solutions currently being used for testing purposes. It has also extended its support to public health authorities and customers to assess their flexibility, timing and needs for specific regional situations in the outbreak. It has scaled up its production of RNA extraction kits and instruments as well as launched the QIAstat-Dx Respiratory SARS-CoV-2 Panel to accelerate the detection of the virus.
On the flip side, the decline in revenues in companion diagnostic co-development projects as well as from QuantiFERON-TB test for latent tuberculosis (TB) detection is concerning. The company also did not provide any financial guidance for the year.
Zacks Rank and Stocks to Consider
QIAGEN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Aphria Inc. , Biogen Inc. (BIIB - Free Report) and Eli Lilly and Company (LLY - Free Report) .
Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.
Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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QIAGEN (QGEN) Q1 Earnings Lag Estimates, Operating Margin Up
QIAGEN N.V.’s (QGEN - Free Report) first-quarter 2020 adjusted earnings per share (EPS) were 34 cents, up 25.9% year over year (up 25.9% at constant exchange rate or CER as well). However, the figure lagged the Zacks Consensus Estimate by a penny.
The adjustment excludes the impact of certain non-recurring items like Business integration, acquisition and restructuring related expenses and amortization expenses, among others.
Reported EPS for the quarter was 17 cents per share, up 30.8% year over year.
Revenues in Detail
Net sales at actual rates in the first quarter rose 6.7% on a year-over-year basis to $372.1 million (up 9% at CER). Also, the top line beat the Zacks Consensus Estimate by 14.5%.
Robust sales were recorded on significant demand for solutions used in the COVID-19 pandemic. However, there were weaker customer demand trends in other areas of the portfolio.
QIAGEN NV Price, Consensus and EPS Surprise
QIAGEN NV price-consensus-eps-surprise-chart | QIAGEN NV Quote
Geographical Revenue Update
In the quarter under review, sales from the Americas (47% of revenues) totaled $174 million, up 2% on a reported basis (up 3% at CER).
Revenues from Europe-Middle East-Africa (34% of revenues) rose 17% reportedly (up 22% at CER) to $128 million.
Further, revenues from Asia-Pacific/Japan (19% of revenues) rose 1% year over year on a reported basis (up 3% at CER) to $69 million.
Segmental Details
As of the first quarter of 2020, QIAGEN has two major customer classes which are Molecular Diagnostics (that includes human healthcare including Precision Medicine and companion diagnostics) and Life Sciences (that includes Pharma and Academia/Applied Testing).
Molecular Diagnostics (representing 47% of net sales) revenues were up 4% on a reported basis (up 7% at CER) to $176 million.
Life Sciences (53% of total revenues) reported revenues of $196 million, up 9% on a reported basis (up 10% at CER).
Sales derived from Applied Testing/Academia rose 13% on a reported basis (up 14% at CER) to $123 million. Pharma sales climbed 3% on a reported basis (up 4% at CER) in the first quarter to $73 million.
Operational Update
Adjusted gross profit in the quarter under review rose 6.7% to $258.7 million. Despite that, gross margin remained marginally unchanged at 69.51% on a 6.7% rise in adjusted cost of revenues (adjusting for acquisition-related intangible amortization) to $113.4 million.
Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring and integration, asset impairment) rose 29.7% year over year to $99.9 million in the first quarter. Adjusted operating margin expanded 476 bps to 26.8%.
Financial Update
QIAGEN exited the first quarter of 2020 with cash and cash equivalents of $656.8 million, up from $623.6 million at the end of 2019.
At the end of the first quarter of 2020, net cash flow from operating activities was $15.9 million compared with $44.7 million a year ago. Moreover, the company reported free cash outflow of $4.1 million at the end of the first quarter against free cash inflow of $21.3 million a year ago.
Guidance
QIAGEN currently anticipates net sales growth of at least 12% year over year at CER and adjusted EPS of at least 40 cents at CER for the second quarter of 2020.
In the second quarter of 2020, the company expects to witness sales growth primarily on the ongoing significant demand for various products and solutions used in coronavirus pandemic testing. This is likely to more than offset lower sales in other areas of the portfolio affected by widespread quarantine and lockdown actions worldwide. QIAGEN also anticipates an adverse currency impact of about 2- 3% on net sales growth at actual rates and an adverse impact of up to about a penny on adjusted EPS.
QIAGEN is, however, currently not in a position to quantify the actual impact of the coronavirus pandemic, even though it expects the growth momentum of the first half of 2020 to continue through the year. Accordingly, it has suspended the full-year financial guidance for now.
Our Take
QIAGEN exited the first quarter of 2020 with better-than-expected revenues. It registered revenue growth across all geographies and each of its operating segments in the first quarter. Instrument sales recorded robust demand for the QIAsymphony automation system, the QIAcube Connect sample processing instrument and the QIAstat-Dx syndromic testing instrument. Expansion in operating margin is encouraging as well.
QIAGEN’s efforts to combat the coronavirus pandemic are noteworthy. It has ramped up production capacity for solutions currently being used for testing purposes. It has also extended its support to public health authorities and customers to assess their flexibility, timing and needs for specific regional situations in the outbreak. It has scaled up its production of RNA extraction kits and instruments as well as launched the QIAstat-Dx Respiratory SARS-CoV-2 Panel to accelerate the detection of the virus.
On the flip side, the decline in revenues in companion diagnostic co-development projects as well as from QuantiFERON-TB test for latent tuberculosis (TB) detection is concerning. The company also did not provide any financial guidance for the year.
Zacks Rank and Stocks to Consider
QIAGEN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Aphria Inc. , Biogen Inc. (BIIB - Free Report) and Eli Lilly and Company (LLY - Free Report) .
Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.
Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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