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Exact Sciences (EXAS) Q4 Earnings, Revenues Top Estimates
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Exact Sciences Corporation (EXAS - Free Report) announced fourth-quarter 2020 results, incurring adjusted loss per share (adjusted for acquisition and integration costs and charges related to asset acquisition) of 9 cents compared with adjusted loss of 37 cents in the year-ago period. However, the adjusted loss was narrower than the Zacks Consensus Estimate of a loss of 19 cents per share.
GAAP loss per share for the fourth quarter was $2.79 compared to the year-ago earnings of 54 cents per share.
Full-year GAAP loss per share was $5.61, wider than the year-earlier loss per share of 64 cents.
Revenues in Detail
The fourth-quarter consolidated revenues (post the Genomic Health business integration) were $466.3 million, up 57.8% year over year. The metric exceeded the Zacks Consensus Estimate marginally by 0.1%.
Full-year revenues were $1.49 billion, reflecting a 70.2% increase from the year-ago period. Revenues surpassed the Zacks Consensus Estimate by 1.4%.
Segments in Detail
Screening revenues, which include laboratory service revenues from Cologuard and revenues from Biomatrica products, were $249.7 million, reflecting a year-over-year increase of 9% on the back of Cologuard volume growth.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Precision Oncology revenues, which include laboratory service revenues from global Oncotype products, were $117.6 million. Revenues from COVID-19 testing were $99.1 million.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 62.8% to $366.6 million. Gross margin expanded 243 basis points (bps) to 78.6% despite a 41.7% surge in total cost.
Research and development expenses surged stupendously by 932.8% year over year to $446.4 million. Sales and marketing expenses rose 39.2% to $166.8 million. General and administrative expenses inched up 0.7% to $145.5 million year over year.
Adjusted operating expenses were $758.7 million in the fourth quarter, up 146.8% year over year. Adjusted operating loss totaled $392.1 million, wider than the year-ago operating loss of $82.3 million.
Financial Update
Exact Sciences exited 2020 with cash and cash equivalents, and marketable securities of $1.84 billion compared with $323.7 million at the end of 2019.
Long-term debt (excluding the current portion) at the end of 2020 was $22.3 million compared with $24 million at the end of 2019.
2021 Outlook
Exact Sciences, due to the persisting pandemic-led uncertainties, has not provided any financial outlook for 2021.
However, the company expects Screening revenues to decline sequentially in the first quarter of 2021 due to typical seasonal trends. Per the company, this fall in revenues will be more pronounced in the first quarter of 2021 due to the spike in COVID-19 cases toward the year-end which lasted through January and is now narrowing down slowly.
Further, Precision Oncology revenues in the first quarter of 2021 are expected to register modest sequential growth on the back of continued recovery in breast cancer diagnosis. However, based on recent trends in COVID-19 cases, the company expects the COVID-19 testing revenues to be down sequentially in the first quarter.
Our Take
Exact Sciences exited the fourth quarter of 2020 with better-than-expected numbers. However, incurring quarterly loss per share unlike earnings in the year-ago period is concerning. The company’s rising expenses are a concern as well. The company not providing any financial outlook for 2021, along with an expectation of continued fall in COVID-19 testing revenues, raises apprehensions. The company’s operating loss in the reported quarter does not bode well either.
However, revenues from the COVID-19 tests conducted during the quarter contributed to the fourth-quarter top line. Robust top-line growth during the quarter, despite the pandemic-led headwinds, is impressive. The company’s legacy Screening business saw an improvement in revenues during the quarter due to Cologuard volume growth, which is encouraging. Ongoing recovery in precision oncology business buoys optimism. Expansion in gross margin bodes well for the stock.
Zacks Rank and Stocks to Consider
Exact Sciences currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Hologic, Inc. (HOLX - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) .
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, beating the Zacks Consensus Estimate by 33.6%. The company currently carries a Zacks Rank #2.
IDEXX reported fourth-quarter 2020 adjusted EPS of $2.01 which surpassed the Zacks Consensus Estimate by 40.6%. Revenues of $720.9 million beat the consensus mark by 5.8%. The company currently carries a Zacks Rank #2.
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Exact Sciences (EXAS) Q4 Earnings, Revenues Top Estimates
Exact Sciences Corporation (EXAS - Free Report) announced fourth-quarter 2020 results, incurring adjusted loss per share (adjusted for acquisition and integration costs and charges related to asset acquisition) of 9 cents compared with adjusted loss of 37 cents in the year-ago period. However, the adjusted loss was narrower than the Zacks Consensus Estimate of a loss of 19 cents per share.
GAAP loss per share for the fourth quarter was $2.79 compared to the year-ago earnings of 54 cents per share.
Full-year GAAP loss per share was $5.61, wider than the year-earlier loss per share of 64 cents.
Revenues in Detail
The fourth-quarter consolidated revenues (post the Genomic Health business integration) were $466.3 million, up 57.8% year over year. The metric exceeded the Zacks Consensus Estimate marginally by 0.1%.
Full-year revenues were $1.49 billion, reflecting a 70.2% increase from the year-ago period. Revenues surpassed the Zacks Consensus Estimate by 1.4%.
Segments in Detail
Screening revenues, which include laboratory service revenues from Cologuard and revenues from Biomatrica products, were $249.7 million, reflecting a year-over-year increase of 9% on the back of Cologuard volume growth.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Exact Sciences Corporation price-consensus-eps-surprise-chart | Exact Sciences Corporation Quote
Precision Oncology revenues, which include laboratory service revenues from global Oncotype products, were $117.6 million. Revenues from COVID-19 testing were $99.1 million.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 62.8% to $366.6 million. Gross margin expanded 243 basis points (bps) to 78.6% despite a 41.7% surge in total cost.
Research and development expenses surged stupendously by 932.8% year over year to $446.4 million. Sales and marketing expenses rose 39.2% to $166.8 million. General and administrative expenses inched up 0.7% to $145.5 million year over year.
Adjusted operating expenses were $758.7 million in the fourth quarter, up 146.8% year over year. Adjusted operating loss totaled $392.1 million, wider than the year-ago operating loss of $82.3 million.
Financial Update
Exact Sciences exited 2020 with cash and cash equivalents, and marketable securities of $1.84 billion compared with $323.7 million at the end of 2019.
Long-term debt (excluding the current portion) at the end of 2020 was $22.3 million compared with $24 million at the end of 2019.
2021 Outlook
Exact Sciences, due to the persisting pandemic-led uncertainties, has not provided any financial outlook for 2021.
However, the company expects Screening revenues to decline sequentially in the first quarter of 2021 due to typical seasonal trends. Per the company, this fall in revenues will be more pronounced in the first quarter of 2021 due to the spike in COVID-19 cases toward the year-end which lasted through January and is now narrowing down slowly.
Further, Precision Oncology revenues in the first quarter of 2021 are expected to register modest sequential growth on the back of continued recovery in breast cancer diagnosis. However, based on recent trends in COVID-19 cases, the company expects the COVID-19 testing revenues to be down sequentially in the first quarter.
Our Take
Exact Sciences exited the fourth quarter of 2020 with better-than-expected numbers. However, incurring quarterly loss per share unlike earnings in the year-ago period is concerning. The company’s rising expenses are a concern as well. The company not providing any financial outlook for 2021, along with an expectation of continued fall in COVID-19 testing revenues, raises apprehensions. The company’s operating loss in the reported quarter does not bode well either.
However, revenues from the COVID-19 tests conducted during the quarter contributed to the fourth-quarter top line. Robust top-line growth during the quarter, despite the pandemic-led headwinds, is impressive. The company’s legacy Screening business saw an improvement in revenues during the quarter due to Cologuard volume growth, which is encouraging. Ongoing recovery in precision oncology business buoys optimism. Expansion in gross margin bodes well for the stock.
Zacks Rank and Stocks to Consider
Exact Sciences currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Hologic, Inc. (HOLX - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) .
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, beating the Zacks Consensus Estimate by 33.6%. The company currently carries a Zacks Rank #2.
IDEXX reported fourth-quarter 2020 adjusted EPS of $2.01 which surpassed the Zacks Consensus Estimate by 40.6%. Revenues of $720.9 million beat the consensus mark by 5.8%. The company currently carries a Zacks Rank #2.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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