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OPKO Health's (OPK) Q3 Earnings, Revenues Top Estimates
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OPKO Health, Inc. (OPK - Free Report) delivered earnings per share (EPS) of 4 cents in the third quarter of 2021, flat year over year. The figure surpassed the Zacks Consensus Estimate of a loss of a penny per share.
Revenues in Detail
OPKO Health registered revenues of $385.8 million in the third quarter, down 9.9% year over year. The figure exceeded the Zacks Consensus Estimate by 26.9%.
Segmental Revenues
OPKO Health manages its operations through two reportable segments – Diagnostics and Pharmaceuticals.
Within the Diagnostics arm, revenues from services amounted to $340.1 million in the reported quarter, down 11.1% year over year, primarily due to a fall in COVID-19 testing volume. However, this was partially offset by an improvement in COVID-19 test reimbursement and an increase in clinical and genomic test revenues.
Within the Pharmaceuticals arm, revenues from products rose 28.6% to $36.9 million owing to the accelerating growth within OPKO’s international pharmaceutical businesses. Revenues from the sales of RAYALDEE in the third quarter of 2021 were $8.5 million, up 4.9% from the prior-year period, primarily on the back of a higher net realized price resulting from lower Medicare Part D rebates.
Total RAYALDEE prescriptions declined 31.1% year over year to approximately 11,500 in the third quarter.
Revenues from transfer of intellectual property totaled $8.8 million, up 29.4% year over year on the back of transactions related to the CAMP4 Therapeutics Corporation and LeaderMed Group agreements. However, this was partially offset by a fall in revenues related to the Pfizer transaction, and lower Somatrogan, and research and development (R&D)-related revenues.
OPKO Health, Inc. Price, Consensus and EPS Surprise
In the quarter under review, OPKO Health’s gross profit fell 8.7% to $142 million. However, gross margin expanded 48 basis points (bps) to 36.8%.
Selling, general & administrative expenses rose 5.2% to $105.1 million. R&D expenses fell 1.1% year over year to $18.3 million. Adjusted operating expenses of $123 million increased 4.2% year over year.
Adjusted operating profit totaled $18 million, reflecting a 50.1% decline from the prior-year quarter. Adjusted operating margin in the third quarter contracted 385 bps to 4.8%.
Financial Position
OPKO Health exited the third quarter of 2021 with cash and cash equivalents of $148.6 million compared with $65.8 million at the end of the second quarter.
Guidance
OPKO Health, due to continued pandemic-led uncertainties, has provided its financial outlook only for the fourth quarter of 2021.
The company expects its revenues for the fourth quarter of 2021 to be in the range of $290 million-$320 million, including revenues from services of $250 million-$280 million. The Zacks Consensus Estimate for the same currently stands at $302.9 million.
The company expects its revenues from product sales to be within the range of $32-$36 million and other revenues to be in the range of $4-$6 million.
Our Take
OPKO Health exited the third quarter with better-than-expected results. Uptick in year-over-year Pharmaceuticals revenues is encouraging. Increase in clinical and genomic test revenues, and revenues from the transfer of intellectual property, along with robust sales of RAYALDEE, are impressive. BioReference Laboratories’ (“BRL”) robust COVID-19 testing volume in the reported quarter raises our optimism. Developments like BRL’s acquisition of the U.S. Ariosa centralized laboratory prenatal testing business from Roche, forming a joint venture with LeaderMed, and the execution of the exclusive worldwide agreement with CAMP4 are encouraging. Health Canada’s approval of NGENLA (somatrogon) injection for pediatric growth hormone deficiency also augurs well. Expansion of gross margin bodes well for the stock.
However, year-over-year fall in the overall top line and the Diagnostics arm’s revenues are concerning. Fall in total RAYALDEE prescriptions is also worrying. Contraction of adjusted operating margin does not bode well for the company. OPKO Health continues to face cut-throat competition in the MedTech space.
Zacks Rank and Key Picks
OPKO Health currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) .
West Pharmaceutical, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Third-quarter revenues of $706.5 million outpaced the consensus mark by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently flaunts a Zacks Rank #1.
AngioDynamics reported first-quarter fiscal 2022 adjusted loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a loss of 5 cents. Revenues of $76.9 million surpassed the Zacks Consensus Estimate by 8.4%. It currently sports a Zacks Rank #1.
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OPKO Health's (OPK) Q3 Earnings, Revenues Top Estimates
OPKO Health, Inc. (OPK - Free Report) delivered earnings per share (EPS) of 4 cents in the third quarter of 2021, flat year over year. The figure surpassed the Zacks Consensus Estimate of a loss of a penny per share.
Revenues in Detail
OPKO Health registered revenues of $385.8 million in the third quarter, down 9.9% year over year. The figure exceeded the Zacks Consensus Estimate by 26.9%.
Segmental Revenues
OPKO Health manages its operations through two reportable segments – Diagnostics and Pharmaceuticals.
Within the Diagnostics arm, revenues from services amounted to $340.1 million in the reported quarter, down 11.1% year over year, primarily due to a fall in COVID-19 testing volume. However, this was partially offset by an improvement in COVID-19 test reimbursement and an increase in clinical and genomic test revenues.
Within the Pharmaceuticals arm, revenues from products rose 28.6% to $36.9 million owing to the accelerating growth within OPKO’s international pharmaceutical businesses. Revenues from the sales of RAYALDEE in the third quarter of 2021 were $8.5 million, up 4.9% from the prior-year period, primarily on the back of a higher net realized price resulting from lower Medicare Part D rebates.
Total RAYALDEE prescriptions declined 31.1% year over year to approximately 11,500 in the third quarter.
Revenues from transfer of intellectual property totaled $8.8 million, up 29.4% year over year on the back of transactions related to the CAMP4 Therapeutics Corporation and LeaderMed Group agreements. However, this was partially offset by a fall in revenues related to the Pfizer transaction, and lower Somatrogan, and research and development (R&D)-related revenues.
OPKO Health, Inc. Price, Consensus and EPS Surprise
OPKO Health, Inc. price-consensus-eps-surprise-chart | OPKO Health, Inc. Quote
Margin Analysis
In the quarter under review, OPKO Health’s gross profit fell 8.7% to $142 million. However, gross margin expanded 48 basis points (bps) to 36.8%.
Selling, general & administrative expenses rose 5.2% to $105.1 million. R&D expenses fell 1.1% year over year to $18.3 million. Adjusted operating expenses of $123 million increased 4.2% year over year.
Adjusted operating profit totaled $18 million, reflecting a 50.1% decline from the prior-year quarter. Adjusted operating margin in the third quarter contracted 385 bps to 4.8%.
Financial Position
OPKO Health exited the third quarter of 2021 with cash and cash equivalents of $148.6 million compared with $65.8 million at the end of the second quarter.
Guidance
OPKO Health, due to continued pandemic-led uncertainties, has provided its financial outlook only for the fourth quarter of 2021.
The company expects its revenues for the fourth quarter of 2021 to be in the range of $290 million-$320 million, including revenues from services of $250 million-$280 million. The Zacks Consensus Estimate for the same currently stands at $302.9 million.
The company expects its revenues from product sales to be within the range of $32-$36 million and other revenues to be in the range of $4-$6 million.
Our Take
OPKO Health exited the third quarter with better-than-expected results. Uptick in year-over-year Pharmaceuticals revenues is encouraging. Increase in clinical and genomic test revenues, and revenues from the transfer of intellectual property, along with robust sales of RAYALDEE, are impressive. BioReference Laboratories’ (“BRL”) robust COVID-19 testing volume in the reported quarter raises our optimism. Developments like BRL’s acquisition of the U.S. Ariosa centralized laboratory prenatal testing business from Roche, forming a joint venture with LeaderMed, and the execution of the exclusive worldwide agreement with CAMP4 are encouraging. Health Canada’s approval of NGENLA (somatrogon) injection for pediatric growth hormone deficiency also augurs well. Expansion of gross margin bodes well for the stock.
However, year-over-year fall in the overall top line and the Diagnostics arm’s revenues are concerning. Fall in total RAYALDEE prescriptions is also worrying. Contraction of adjusted operating margin does not bode well for the company. OPKO Health continues to face cut-throat competition in the MedTech space.
Zacks Rank and Key Picks
OPKO Health currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. (WST - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) .
West Pharmaceutical, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Third-quarter revenues of $706.5 million outpaced the consensus mark by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently flaunts a Zacks Rank #1.
AngioDynamics reported first-quarter fiscal 2022 adjusted loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a loss of 5 cents. Revenues of $76.9 million surpassed the Zacks Consensus Estimate by 8.4%. It currently sports a Zacks Rank #1.