QIAGEN N.V.’s ( QGEN Quick Quote QGEN - Free Report) second-quarter 2021 adjusted earnings per share (EPS) were 67 cents (66 cents at constant exchange rate or CER), up 21.8% year over year (up 20% at constant exchange rate or CER). Moreover, the figure surpassed the Zacks Consensus Estimate by 1.5%.
Notably, the bottom line exceeded the company’s second-quarter guidance of 62-64 cents at CER.
The adjustment excludes the impact of certain non-recurring items like business integration, acquisition, restructuring-related expenses, and purchased intangibles amortization expenses, among others.
GAAP EPS for the quarter was 52 cents per share, improving significantly from the year-ago growth per share of 38 cents, reflecting an uptick of 36.8%.
Revenues in Detail
Net sales in the second quarter rose 27.9% on a year-over-year basis to $567.3 million (up 24% at CER). Also, the top line exceeded the Zacks Consensus Estimate by 0.9%. Top-line growth also exceeded the company’s second-quarter expectation of at least 20% year-over-year growth at CER.
Sales growth was recorded on improvements in non-COVID areas of the portfolio and trend improvement in the company’s core business.
Geographical Revenue Update
In the quarter under review, sales from the Americas (45% of sales) totaled $257 million, up 45% on a reported basis (up 44% at CER).
Revenues from Europe, Middle East and Africa (36% of sales) rose 23% reportedly (up 15% at CER) to $202 million.
Further, revenues from Asia-Pacific/ Japan (19% of sales) rose 10% year over year on a reported basis (up 4% at CER) to $109 million.
As of the second quarter of 2021, QIAGEN had two major customer classes – Molecular Diagnostics and Life Sciences.
Molecular Diagnostics (representing 48% of net sales) revenues were up 33% on a reported basis (up 28% at CER) to $272 million.
Life Sciences (20% of total revenues) reported revenues of $296 million, up 24% on a reported basis (up 20% at CER).
Adjusted gross profit in the quarter under review rose 24.8% to $386.9 million. However, adjusted gross margin contracted 171 basis points (bps) to 68.2% due to a 35.3% rise in total cost of sales (adjusting for acquisition-related intangible amortization) to $180.4 million.
Sales and marketing expenses of QIAGEN rose 16.9% to $110.4 million year over year. Research and development expenses increased 63.9% year over year to $52.2 million whereas general and administrative expenses rose 29.9% year over year to $31 million.
Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring and integration, asset impairment) rose 20.9% year over year to $193.4 million in the second quarter. Adjusted operating margin however contracted 198 bps to 34.1%.
QIAGEN exited second-quarter 2021 with cash and cash equivalents, and short-term investments of $898 million, up from $791.7 million at the end of first-quarter 2021. Long-term debt was $1.94 billion in second-quarter 2021 compared with $1.93 billion in the prior quarter.
Cumulative net cash flow from operating activities at the end of second-quarter 2021 was $285 million compared with $150.9 million a year ago.
In July ,QIAGEN updated its full-year view.
Full-year net sales are now expected to grow at least 12% at CER (a significant decline from earlier outlook of CER growth of 18-20%). Adjusted EPS for 2021 is now expected to be minimum $2.42 at CER (prior outlook of about $2.42-2.46 at CER).
Considering the Jun 30, 2021 exchange rate, currency movements against the U.S. dollar are still expected to create a positive impact of about 2-3 percentage points on net sales growth at actual rates for full-year 2021. Further, 2-3 cents of positive impact are expected on adjusted EPS.
For the third quarter, the company expects to report net sales of $483.8 million at CER (flat year over year). Adjusted EPS is expected to be about 52-53 cents at CER compared with 58 cents in the year-ago quarter.
QIAGEN exited the second quarter of 2021 with better-than-expected revenues and earnings. It registered revenue growth across all geographies and both its operating segments in the second quarter.
However, a faster-than-expected vaccination uptake has led to a reduction in demand for COVID-19 testing. Taking this into consideration, earlier this month, the company had significantly reduced its 2021 guidance to reflect the COVID-19 testing trends for the second half of 2021. A weak margin scenario is an added concern.
Zacks Rank and Key Picks
QIAGEN currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have already announced their quarterly results are
Boston Scientific Corporation ( BSX Quick Quote BSX - Free Report) , West Pharmaceutical Services, Inc. ( WST Quick Quote WST - Free Report) and Laboratory Corporation of America Holdings ( LH Quick Quote LH - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific reported second-quarter 2021 adjusted EPS of 40 cents, which beat the Zacks Consensus Estimate by 8.1%. Second-quarter revenues of $3.08 billion outpaced the consensus mark by 4.4%.
West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%.
LabCorp reported second-quarter 2021 adjusted EPS of $6.13, surpassing the Zacks Consensus Estimate by 8.7%. Revenues of $3.84 billion exceeded the Zacks Consensus Estimate by 6.9%.