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Accuray (ARAY) Earnings Beat in Q4, Gross Orders Rise Y/Y
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Accuray Incorporated (ARAY - Free Report) reported fourth-quarter fiscal 2018 adjusted loss of a penny compared with the Zacks Consensus Estimate of a loss of 2 cents. Notably, the company had reported loss per share of 6 cents a year ago.
The company posted net revenues worth $113.8 million, also surpassing the Zacks Consensus Estimate of $108.5 million. On a year-over-year basis, revenues climbed 1.5% in the quarter.
Over the past year, shares of Accuray have declined 13% compared with the industry's fall of 6.1%.
The stock carries a Zacks Rank #3 (Hold).
FY18 at a Glance
For fiscal 2018, Accuray posted revenues worth $404.9 million, which beat the Zacks Consensus Estimate of $399.6 million. Revenues also improved 5.6% from fiscal 2017.
Adjusted loss per share for fiscal 2018 was 28 cents compared with the Zacks Consensus Estimate of a loss of 29 cents. Notably, loss per share in fiscal 2017 was 36 cents.
Accuray Incorporated Price, Consensus and EPS Surprise
Product Revenues: Product revenues declined 9.8% year over year to $54.6 million in the reported quarter. Per management, the downside was due to a decrease in unit volume, partially offset by higher average sales price per unit.
Service Revenues: Service revenues totaled $59.2 million, which rose 14.8% from the year-ago quarter. The upside can be attributed to Accuray's recent software releases.
Gross Order Update: Gross orders in the fourth quarter of fiscal 2018 totaled $96.4 million, up 12.5% on a year-over-year basis.
Total gross orders for fiscal 2018 was $304.9 million, up 2.2% from fiscal 2017.
Radixact Update
Per management, Accuray has received roughly 100 orders for its flagship Radixact since launch.
Furthermore, the company won a multi-system, multi-hospital order from Mercy in St. Louis for Radixact and CyberKnife M6 systems.
In the quarter under review, Accuray received a regulatory approval from India to sell the Radixact X9 system.
Geographical Gains
Per management, the company’s full-year gross order growth in the United States was 8%. Growth in EMEA and Japan were 8% and 10%, respectively, while the same in APAC declined 24% on a year-over-year basis. Japan contributed 30 Radixact orders.
Per management, delay and lack of availability of type A radiotherapy licenses in China marred growth in the APAC region.
Margins
Gross profit in the fiscal fourth quarter totaled $48 million, up 11.1% on a year-over-year basis. Gross margin in the quarter was 42.2%, up 370 basis points (bps).
Operating income in the quarter grossed $3.1 million, up 9.9% year over year. Operating margin was 2.7%, which improved 20 bps.
Adjusted EBITDA was $7.8 million in the quarter, down 24.2% from the prior-year quarter.
Guidance
For fiscal 2019, product revenue growth is expected between 4-8% and service revenue growth approximately 2%, resulting in total revenues between $415 million and $425 million. The Zacks Consensus Estimate is pegged at $413.3 million, below the guided range.
Adjusted EBITDA is projected between $21 million to $27 million, representing year-over-year growth of approximately 23-58%.
Our Take
Accuray exited the fiscal fourth quarter on a solid note. Loss per share was narrower than estimates and revenues surpassed the consensus mark as well. The company continues to gain from its flagship Radixact platform, which witnessed sizeable orders in the quarter. The system drove the company’s TomoTherapy platform. Moreover, a regulatory approval for Radixact X9 system in India buoys optimism. Gross orders also rose in the United States and EMEA region. The company’s service revenues rose year over year. Significant expansion in gross margin is another positive.
On the flip side, declining product revenues raise concern. Falling orders in the APAC region owing to headwinds in China adds to the woes. Long sales and implementation cycle of the CyberKnife and TomoTherapy systems is another negative. Furthermore, unfavorable product mix, sluggish macro-economic conditions and pricing headwinds are worrisome.
Earnings of MedTech Majors at a Glance
A few better-ranked stocks in the broader medical space, which also reported solid earnings this season, are Intuitive Surgical, Inc (ISRG - Free Report) , Illumina, Inc (ILMN - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Intuitive Surgical reported adjusted earnings of $2.76 per share in the second quarter of 2018, which beat the Zacks Consensus Estimate of $2.48. Adjusted earnings improved 38% year over year.
Illumina reported adjusted earnings of $1.43 per share, beating the consensus mark of $1.11.
Integer Holdings posted adjusted earnings of $1.06 per share in the second quarter of 2018, beating the Zacks Consensus Estimate of 90 cents.
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Accuray (ARAY) Earnings Beat in Q4, Gross Orders Rise Y/Y
Accuray Incorporated (ARAY - Free Report) reported fourth-quarter fiscal 2018 adjusted loss of a penny compared with the Zacks Consensus Estimate of a loss of 2 cents. Notably, the company had reported loss per share of 6 cents a year ago.
The company posted net revenues worth $113.8 million, also surpassing the Zacks Consensus Estimate of $108.5 million. On a year-over-year basis, revenues climbed 1.5% in the quarter.
Over the past year, shares of Accuray have declined 13% compared with the industry's fall of 6.1%.
The stock carries a Zacks Rank #3 (Hold).
FY18 at a Glance
For fiscal 2018, Accuray posted revenues worth $404.9 million, which beat the Zacks Consensus Estimate of $399.6 million. Revenues also improved 5.6% from fiscal 2017.
Adjusted loss per share for fiscal 2018 was 28 cents compared with the Zacks Consensus Estimate of a loss of 29 cents. Notably, loss per share in fiscal 2017 was 36 cents.
Accuray Incorporated Price, Consensus and EPS Surprise
Accuray Incorporated Price, Consensus and EPS Surprise | Accuray Incorporated Quote
Q4 Details
Product Revenues: Product revenues declined 9.8% year over year to $54.6 million in the reported quarter. Per management, the downside was due to a decrease in unit volume, partially offset by higher average sales price per unit.
Service Revenues: Service revenues totaled $59.2 million, which rose 14.8% from the year-ago quarter. The upside can be attributed to Accuray's recent software releases.
Gross Order Update: Gross orders in the fourth quarter of fiscal 2018 totaled $96.4 million, up 12.5% on a year-over-year basis.
Total gross orders for fiscal 2018 was $304.9 million, up 2.2% from fiscal 2017.
Radixact Update
Per management, Accuray has received roughly 100 orders for its flagship Radixact since launch.
Furthermore, the company won a multi-system, multi-hospital order from Mercy in St. Louis for Radixact and CyberKnife M6 systems.
In the quarter under review, Accuray received a regulatory approval from India to sell the Radixact X9 system.
Geographical Gains
Per management, the company’s full-year gross order growth in the United States was 8%. Growth in EMEA and Japan were 8% and 10%, respectively, while the same in APAC declined 24% on a year-over-year basis. Japan contributed 30 Radixact orders.
Per management, delay and lack of availability of type A radiotherapy licenses in China marred growth in the APAC region.
Margins
Gross profit in the fiscal fourth quarter totaled $48 million, up 11.1% on a year-over-year basis. Gross margin in the quarter was 42.2%, up 370 basis points (bps).
Operating income in the quarter grossed $3.1 million, up 9.9% year over year. Operating margin was 2.7%, which improved 20 bps.
Adjusted EBITDA was $7.8 million in the quarter, down 24.2% from the prior-year quarter.
Guidance
For fiscal 2019, product revenue growth is expected between 4-8% and service revenue growth approximately 2%, resulting in total revenues between $415 million and $425 million. The Zacks Consensus Estimate is pegged at $413.3 million, below the guided range.
Adjusted EBITDA is projected between $21 million to $27 million, representing year-over-year growth of approximately 23-58%.
Our Take
Accuray exited the fiscal fourth quarter on a solid note. Loss per share was narrower than estimates and revenues surpassed the consensus mark as well. The company continues to gain from its flagship Radixact platform, which witnessed sizeable orders in the quarter. The system drove the company’s TomoTherapy platform. Moreover, a regulatory approval for Radixact X9 system in India buoys optimism. Gross orders also rose in the United States and EMEA region. The company’s service revenues rose year over year. Significant expansion in gross margin is another positive.
On the flip side, declining product revenues raise concern. Falling orders in the APAC region owing to headwinds in China adds to the woes. Long sales and implementation cycle of the CyberKnife and TomoTherapy systems is another negative. Furthermore, unfavorable product mix, sluggish macro-economic conditions and pricing headwinds are worrisome.
Earnings of MedTech Majors at a Glance
A few better-ranked stocks in the broader medical space, which also reported solid earnings this season, are Intuitive Surgical, Inc (ISRG - Free Report) , Illumina, Inc (ILMN - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
While Illumina and Integer Holdings sport a Zacks Rank #1 (Strong Buy), Intuitive Surgical has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported adjusted earnings of $2.76 per share in the second quarter of 2018, which beat the Zacks Consensus Estimate of $2.48. Adjusted earnings improved 38% year over year.
Illumina reported adjusted earnings of $1.43 per share, beating the consensus mark of $1.11.
Integer Holdings posted adjusted earnings of $1.06 per share in the second quarter of 2018, beating the Zacks Consensus Estimate of 90 cents.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>