QIAGEN N.V.’s (QGEN Quick QuoteQGEN - Free Report) fourth-quarter 2021 adjusted earnings per share (EPS) were 74 cents (75 cents at constant exchange rate or CER), up 8.8% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate by 23.3%.

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 56 cents per share, down 38.5% year over year.

For the full year, adjusted earnings were $2.65 per share, 23.3% up from the year-ago period. It also beat the Zacks Consensus Estimate by 5.2%.

Revenues in Detail

Net sales in the fourth quarter rose 1.9% on a year-over-year basis to $582.4 million (up 4% at CER). The top line exceeded the Zacks Consensus Estimate by 9.4%. Top-line growth also exceeded the company’s fourth-quarter net sales expectation of 9% CER decline.

Sales were driven by high demand for COVID-19 test products and improving trends in the non-COVID portfolio.

Full-year revenues were $2.25 billion, reflecting a 20.4% increase from the year-ago period. Revenues also surpassed the Zacks Consensus Estimate by 2.3%.

Geographical Revenue Update

In the quarter under review, sales from the Americas (44% of sales) totaled $259 million, up 5% on a reported basis (up 5% at CER).

Revenues from Europe, the Middle East and Africa (38% of sales) fell 3% reportedly (up 2% at CER) to $219 million.

Further, revenues from Asia-Pacific/Japan (18% of sales) increased 6% year over year on a reported basis (up 7% at CER) to $104 million.

Segmental Details

As of the fourth quarter of 2021, QIAGEN had two major customer classes –- Molecular Diagnostics and Life Sciences.

Molecular Diagnostics (representing 54% of net sales) revenues were up 9% on a reported basis (up 12% at CER) to $313 million.

QIAGEN N.V. Price, Consensus and EPS Surprise

QIAGEN N.V. price-consensus-eps-surprise-chart | QIAGEN N.V. Quote

Life Sciences (46% of total revenues) reported revenues of $269 million, down 5% on a reported basis (down 4% at CER).

Operational Update

Adjusted gross profit in the quarter under review fell 0.4% to $389.3 million. Adjusted gross margin also contracted 159 basis points (bps) to 66.8% due to a 7.1% rise in total cost of sales (adjusting for acquisition-related intangible amortization) to $193.1 million.

Sales and marketing expenses of QIAGEN fell 1.6% to $119.4 million year over year. Research and development expenses contracted 9.1% year over year to $42.1 million, whereas general and administrative expenses rose 3.8% year over year to $32.9 million.

Adjusted operating income (excluding items like acquisition-related intangible amortization, restructuring and integration, asset impairment) rose 1.8% year over year to $194.9 million in the fourth quarter. Adjusted operating margin, however, contracted 5 bps to 33.5%.

Financial Update

QIAGEN exited 2021 with cash and cash equivalents, and short-term investments of $1.07 billion, up from $715.2 million at the end of 2020. Long-term debt was $1.09 billion in 2021, down from $1.88 billion in the prior quarter.

Cumulative net cash flow from operating activities at the end of 2021 was $639 million compared with $457.8 million a year ago.

Guidance

QIAGEN initiated an outlook for full-year 2022.

Full-year net sales are expected to be at least $2.07 billion at CER versus $2.25 billion in the year-ago quarter. The Zacks Consensus Estimate for the metric is pegged at $2.09 billion.

Adjusted EPS for 2021 is expected to be at least $2.05 at CER versus $2.65 in the year-ago quarter. The Zacks Consensus Estimate for adjusted EPS is pegged at $1.98.

For the fourth quarter, the company expects net sales to grow at least 7% CER. The Zacks Consensus Estimate for the same is pegged at $531.5 million.

Adjusted EPS is expected to be at least 72 cents at CER versus 66 cents in the year-ago quarter. The Zacks Consensus Estimate for adjusted EPS is pegged at 60 cents.

Our Take

QIAGEN exited the fourth quarter of 2021 with better-than-expected revenues and earnings. In the fourth quarter, it registered revenue growth at CER across all geographies and operating segments. Stronger-than-expected demand for COVID-19 testing solutions in the reported quarter also buoys optimism. The company witnessed improving trends for its non-COVID portfolio, which is encouraging. An increase in short-term cash level is an added plus. Further, the bullish full-year 2022 guidance for net sales and EPS is indicative that this growth momentum will continue. However, a rise in operating costs does not bode well for the company. A weak margins scenario is an added concern.

Zacks Rank & Key Picks

QIAGEN currently carries a Zacks Rank #3 (Hold).

Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

AMN Healthcare Services, Inc. (AMN Quick QuoteAMN - Free Report) has an Earnings ESP of +10.29% and a Zacks Rank of #1 (Strong Buy). AMN Healthcare is slated to release fourth-quarter and full-year 2021 results on Feb 17. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 6.5% compares favorably with the industry’s 0.9%.

Allscripts Healthcare Solutions, Inc. (MDRX Quick QuoteMDRX - Free Report) has an Earnings ESP of +10.11% and a Zacks Rank of #2 (Buy). Allscripts will release fourth quarter and full-year 2021 results on Feb 24.

Allscripts’ long-term earnings growth rate is estimated at 11.1%. MDRX’s earnings yield of 5% compares favorably with the industry’s (4.9%).

Henry Schein, Inc. (HSIC Quick QuoteHSIC - Free Report) has an Earnings ESP of +1.94% and a Zacks Rank of 2. The company will report fourth quarter and full-year 2021 results on Feb 15.

Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 6.2% compares favorably with the industry’s 4.3%.