Accuray Incorporated ( ARAY Quick Quote ARAY - Free Report) reported a loss of a penny per share for the third quarter of fiscal 2022 against breakeven earnings per share (“EPS”) in the year-ago period. However, the loss per share was narrower than the Zacks Consensus Estimate of a loss of 6 cents per share. Revenues in Detail
Accuray registered revenues of $96.2 million in the fiscal 2022 third quarter, down 6.2% year over year. The figure lagged the Zacks Consensus Estimate by 3.4%.
Accuray derives revenues from two sources — Products and Services.
In the fiscal third quarter, Product revenues declined 8.9% from the year-ago quarter to $43.2 million. CyberKnife accounted for around 22% of revenue unit volume in the quarter whereas the TomoTherapy platform accounted for the remaining 78%.
Services revenues fell 3.9% from the year-ago quarter to $52.9 million, primarily due to unfavorable foreign exchange impacts.
Gross orders totaled $88.6 million, up 1.4% year over year.
In the quarter under review, Accuray’s gross profit fell 12% to $34.8 million. Gross margin contracted 238 basis points (bps) to 36.2%.
Selling and marketing expenses rose 2.2% to $10.8 million. Research and development expenses went up 6.3% year over year to $14.1 million, while general and administrative expenses went down 9.8% year over year to $10.2 million. Total operating expenses of $35.1 million dipped 0.1% year over year.
Total operating loss was $0.3 million against the prior-year quarter’s operating profit of $4.4 million.
Accuray exited the third quarter of fiscal 2022 with cash, cash equivalents and short-term restricted cash of $97.8 million compared with $123.2 million at the end of fiscal second quarter.
Total debt (including short-term debt) at the end of fiscal 2022 third quarter was $181.2 million compared with $182 million at the end of fiscal second quarter.
Accuray has reiterated its revenue outlook for fiscal 2022 based on current expectations.
The company continues to expect its fiscal year revenues to be $420-$430 million, reflecting year-over-year growth of 7% at the midpoint of the range. The Zacks Consensus Estimate for the same is pegged at $425.6 million.
Accuray exited the fiscal third quarter of 2022 with narrower-than-expected loss per share. Strong demand for the ClearRT Helical kVCT Imaging for the Radixact System and VOLO Ultra enhancement to the Accuray Precision treatment planning system for the Radixact System and CyberKnife S7 platform are impressive. Favorable phase III trial data indicating that Accuray TomoTherapy Helical Radiotherapy System can aid in preserving breast cancer patients' long-term heart and lung functionality raises optimism regarding the stock.
Completion of the introduction of CyberKnife Neuro package with Brainlab Elements software at the Radiosurgery Society and positive 10-year data showing that Accuray CyberKnife System can provide long-lasting relief from pain caused by trigeminal neuralgia, are other highlights. Uptick in gross orders during the reported quarter is also encouraging.
However, the company’s lower-than-expected revenues in the quarter are disappointing. Year-over-year decline in the overall top line as well as in both Products and Services revenues, are also worrying. Contraction of gross margin also does not bode well.
Zacks Rank and Key Picks
Accuray currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are
Qiagen N.V. ( QGEN Quick Quote QGEN - Free Report) , UnitedHealth Group Incorporated ( UNH Quick Quote UNH - Free Report) and Alkermes plc ( ALKS Quick Quote ALKS - Free Report) .
Qiagen, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 80 cents, which beat the Zacks Consensus Estimate by 12.7%. Revenues of $628.4 million outpaced the consensus mark by 6.5%. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Qiagen has an estimated long-term growth rate of 11.5%. QGEN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.7%.
UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.
UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. First-quarter revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’s earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.