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Quidel (QDEL) Q1 Earnings, Revenues Surpass Estimates, Up Y/Y

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Quidel Corporation (QDEL - Free Report) delivered adjusted earnings per share (“EPS”) of $11.66 in the first quarter of 2022, up by a huge 166.2% year over year. The figure surpassed the Zacks Consensus Estimate by 25.7%.

The adjustments include expenses related to amortization of intangibles and non-cash stock compensation expenses, among others.

GAAP EPS for the quarter was $11.31, reflecting a 176.5% surge from the year-earlier figure.

Revenues in Detail

Quidel registered revenues of $1 billion in the first quarter, which jumped 167% year over year. The figure surpassed the Zacks Consensus Estimate by 21.8%.

The year-over-year revenue surge was primarily led by significantly higher sales of Rapid Immunoassay products, which were minimally offset by lower sales of Cardiometabolic Immunoassay and Molecular Diagnostic Solutions products.

Total revenues from COVID-19 products increased 211% year over year to $836.1 million. Per management, Quidel sold over 126 million COVID tests in the first quarter of 2022, including 113 million tests of QuickVue, 12 million tests of Sofia and over two million of all other tests.

Total revenues from Influenza products were $89.1 million, up by a stupendous 443.3% year over year, including $54.2 million of Sofia ABC revenues, $25.4 million of Sofia Flu revenues and $5.9 million of QuickVue flu revenues.

Core business revenues, excluding COVID-19 and Beckman B-type Natriuretic Peptide (“BNP”) revenues, grew 105% year over year to $149.4 million.

Segments in Detail

Quidel derives revenues from four product categories — Rapid Immunoassay, Cardiometabolic Immunoassay, Molecular Diagnostic Solutions and Specialized Diagnostic Solutions.

In the first quarter, Rapid Immunoassay revenues surged 275.7% from the year-ago quarter’s level to $892.8 million, primarily driven by significant sales of QuickVue At-Home OTC (over-the-counter) COVID-19 tests as well as increased sales of Sofia Influenza + SARS and Sofia Influenza tests.

Cardiometabolic Immunoassay revenues were down 24.6% year over year to $50.2 million. This decline was caused by the impact of the transition agreement that Quidel entered in July 2021 with Beckman Coulter, Inc. for the latter’s BNP assay business. The segment included revenues of $33.4 million from the Triage business (up 1.2% year over year), with strong growth in Asia Pacific and EMEA, offset by a decline in the United States.

Molecular Diagnostic Solutions revenues were $45.9 million, down 23.7%. This included revenues of $38.2 million from the Lyra SARS-CoV-2 products, $5.7 million of Solana system and $0.4 million of Savanna system.

Revenues from Specialized Diagnostic Solutions improved 22.6% year over year to $13.3 million, driven by an increase in sales of QDEL’s DHI (Diagnostic Hybrids) Respiratory products.

Quidel Corporation Price, Consensus and EPS Surprise

Quidel Corporation Price, Consensus and EPS Surprise

Quidel Corporation price-consensus-eps-surprise-chart | Quidel Corporation Quote

Margin Trend

In the quarter under review, Quidel’s gross profit surged 145.1% to $739.9 million. However, gross margin contracted by a huge 662 basis points (bps) to 73.8%.

Sales and marketing expenses rose 91% to $65.4 million. Research and development expenses went up 13.1% year over year to $26.4 million, while general and administrative expenses climbed 25.6% year over year to $24.5 million. Adjusted operating expenses of $116.3 million increased 50.9% year over year.

Adjusted operating profit totaled $623.7 million, reflecting a 177.3% jump from the prior-year quarter’s level. Adjusted operating margin in the first quarter expanded 231 bps to 62.2%.

Financial Position

Quidel exited first-quarter 2022 with cash and cash equivalents of $1.28 billion compared with $802.8 million at the end of 2021. Total debt (including short-term debt) at the end of first-quarter 2022 was $0.5 million compared with $0.6 million at the end of 2021.

Our Take

Quidel ended the first quarter of 2022 with better-than-expected results. Its robust overall top- and bottom-line performances were impressive. The company recorded strong Rapid Immunoassay and Specialized Diagnostic Solutions revenues, along with robust demand for COVID-19 and Influenza products, which is encouraging. Expansion of adjusted operating margin bodes well for the stock.

However, decline in revenues in its Cardiometabolic Immunoassay and Molecular Diagnostic Solutions product categories is discouraging. Contraction of gross margin also does not bode well. The company not providing any financial outlook raises our apprehensions.

Zacks Rank and Key Picks

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

Some better-ranked stocks in the broader medical space that have announced quarterly results are Omnicell, Inc. (OMCL - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Alkermes plc (ALKS - Free Report) .

Omnicell, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Omnicell has an estimated long-term growth rate of 16%. OMCL’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13.4%.

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. 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’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.