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Exact Sciences (EXAS) Q2 Earnings Top Estimates, Margins Down
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Exact Sciences Corporation (EXAS - Free Report) reported a net loss of 94 cents per share in second-quarter 2022, narrower than the net loss of $1.03 per share in the year-ago quarter. The metric was also narrower than the Zacks Consensus Estimate of a loss of $1.07.
Our model projected a net loss of $1.06 cents in the second quarter.
Revenues in Detail
Second-quarter consolidated revenues were $521.6 million, up 19.9% year over year. The metric exceeded the Zacks Consensus Estimate by 5%.
The second-quarter revenue compares to our own estimate of $495.6 million.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics, and immaterial revenues from Biomatrica products, were $353.9 million, reflecting a year-over-year increase of 34%. The upside was driven by impressive contributions from PreventionGenetics and Cologuard volume growth. In the quarter, 9,000 new healthcare providers ordered Cologuard.
For the Screening segment, we projected $342 million of revenues in the second quarter.
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $154 million, up 11.8% year over year.
Exact Sciences Corporation Price, Consensus and EPS Surprise
For the Precision Oncology segment, we projected $147.4 million of revenues in the second quarter.
Revenues from COVID-19 testing totaled $13.8 million, down 58% year over year.
This figure compares to our COVID-19 testing estimate of $6.2 million for Q2.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 17.5% to $377 million. The gross margin contracted 151 basis points (bps) to 72.3%.
Research and development expenses contracted 0.1% year over year to $106.1 million. Sales and marketing expenses increased 10.8% to $215.9 million. General and administrative expenses rose 8.4% year over year to $181.7 million.
Adjusted operating expenses were $503.7 million in the second quarter, up 7.5% year over year. Adjusted operating loss totaled $126.6 million, narrower than the year-ago operating loss of $147.8 million.
Financial Update
Exact Sciences exited second-quarter 2022 with cash and cash equivalents and marketable securities of $728 million compared with $816.9 million at the end of the first quarter of 2022.
The company reported long-term debt of $50 million on its balance sheet at the end of second-quarter 2022.
2022 Outlook
The company now expects revenues in the range of $1,980-$2,022 million (compared to the earlier projected range of $1,985-$2,032 million) for 2022. The Zacks Consensus Estimate for the same is pegged at $2.02 billion.
For 2022, the company has reaffirmed its Screening revenues expectation in the range of $1,350-$1,372 million. The company now expects Precision Oncology revenues in the range of $580-$590 million (earlier projection $595-$610 million). The company has also updated its outlook for COVID-19 testing revenues in the band of $50-$60 million (up from the prior projection of $40-$50).
Our Take
Exact Sciences exited the second quarter of 2022 with better-than-expected results. The decline in quarterly loss compared to the year-ago period is encouraging. Robust revenues from the Screening and Precision Oncology segments contributed to the second-quarter top line. The impressive Cologuard volumes were driven by enhanced sales team productivity, marketing agreement with Katie Couric, three-year rescreens and increased usage in the 45-49 age group. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are added advantages.
On the flip side, the decline in COVID-19 sales hampered top-line growth. The company incurred an operating loss in the quarter under review, raising apprehension. Contraction in margins on escalating costs does not bode well. A decline in short-term cash level is a concern as well.
Zacks Rank and Other Key Picks
Exact Sciences currently carries a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merck & Co. (MRK - Free Report) .
Quest Diagnostics, carrying a Zacks Rank #2 (Buy), reported second-quarter 2022 adjusted EPS of $2.36, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $2.45 billion outpaced the consensus mark by 7.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has an earnings yield of 7.1% compared with the industry’s 3.2%. DGX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 12.1%.
Medpace Holdings, having a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $1.46, which beat the Zacks Consensus Estimate by 8.9%. Revenues of $351.2 million outpaced the consensus mark by 1.3%.
Medpace Holdings has an estimated growth rate of 22.7% for full-year 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 17.3%.
Merck reported second-quarter 2022 adjusted earnings of $1.87 per share, beating the Zacks Consensus Estimate by 11.9%. Revenues of $14.6 billion surpassed the Zacks Consensus Estimate by 5.4%. It currently has a Zacks Rank #2.
Merck has a long-term estimated growth rate of 10.1%. MRK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 16.8%.
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Exact Sciences (EXAS) Q2 Earnings Top Estimates, Margins Down
Exact Sciences Corporation (EXAS - Free Report) reported a net loss of 94 cents per share in second-quarter 2022, narrower than the net loss of $1.03 per share in the year-ago quarter. The metric was also narrower than the Zacks Consensus Estimate of a loss of $1.07.
Our model projected a net loss of $1.06 cents in the second quarter.
Revenues in Detail
Second-quarter consolidated revenues were $521.6 million, up 19.9% year over year. The metric exceeded the Zacks Consensus Estimate by 5%.
The second-quarter revenue compares to our own estimate of $495.6 million.
Segments in Detail
Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics, and immaterial revenues from Biomatrica products, were $353.9 million, reflecting a year-over-year increase of 34%. The upside was driven by impressive contributions from PreventionGenetics and Cologuard volume growth. In the quarter, 9,000 new healthcare providers ordered Cologuard.
For the Screening segment, we projected $342 million of revenues in the second quarter.
Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $154 million, up 11.8% year over year.
Exact Sciences Corporation Price, Consensus and EPS Surprise
Exact Sciences Corporation price-consensus-eps-surprise-chart | Exact Sciences Corporation Quote
For the Precision Oncology segment, we projected $147.4 million of revenues in the second quarter.
Revenues from COVID-19 testing totaled $13.8 million, down 58% year over year.
This figure compares to our COVID-19 testing estimate of $6.2 million for Q2.
Margin
In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 17.5% to $377 million. The gross margin contracted 151 basis points (bps) to 72.3%.
Research and development expenses contracted 0.1% year over year to $106.1 million. Sales and marketing expenses increased 10.8% to $215.9 million. General and administrative expenses rose 8.4% year over year to $181.7 million.
Adjusted operating expenses were $503.7 million in the second quarter, up 7.5% year over year. Adjusted operating loss totaled $126.6 million, narrower than the year-ago operating loss of $147.8 million.
Financial Update
Exact Sciences exited second-quarter 2022 with cash and cash equivalents and marketable securities of $728 million compared with $816.9 million at the end of the first quarter of 2022.
The company reported long-term debt of $50 million on its balance sheet at the end of second-quarter 2022.
2022 Outlook
The company now expects revenues in the range of $1,980-$2,022 million (compared to the earlier projected range of $1,985-$2,032 million) for 2022. The Zacks Consensus Estimate for the same is pegged at $2.02 billion.
For 2022, the company has reaffirmed its Screening revenues expectation in the range of $1,350-$1,372 million. The company now expects Precision Oncology revenues in the range of $580-$590 million (earlier projection $595-$610 million). The company has also updated its outlook for COVID-19 testing revenues in the band of $50-$60 million (up from the prior projection of $40-$50).
Our Take
Exact Sciences exited the second quarter of 2022 with better-than-expected results. The decline in quarterly loss compared to the year-ago period is encouraging. Robust revenues from the Screening and Precision Oncology segments contributed to the second-quarter top line. The impressive Cologuard volumes were driven by enhanced sales team productivity, marketing agreement with Katie Couric, three-year rescreens and increased usage in the 45-49 age group. The growing uptake of the company’s Oncotype DX Breast and therapy selection products are added advantages.
On the flip side, the decline in COVID-19 sales hampered top-line growth. The company incurred an operating loss in the quarter under review, raising apprehension. Contraction in margins on escalating costs does not bode well. A decline in short-term cash level is a concern as well.
Zacks Rank and Other Key Picks
Exact Sciences currently carries a Zacks Rank #3 (Hold).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated (DGX - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merck & Co. (MRK - Free Report) .
Quest Diagnostics, carrying a Zacks Rank #2 (Buy), reported second-quarter 2022 adjusted EPS of $2.36, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $2.45 billion outpaced the consensus mark by 7.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has an earnings yield of 7.1% compared with the industry’s 3.2%. DGX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 12.1%.
Medpace Holdings, having a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $1.46, which beat the Zacks Consensus Estimate by 8.9%. Revenues of $351.2 million outpaced the consensus mark by 1.3%.
Medpace Holdings has an estimated growth rate of 22.7% for full-year 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 17.3%.
Merck reported second-quarter 2022 adjusted earnings of $1.87 per share, beating the Zacks Consensus Estimate by 11.9%. Revenues of $14.6 billion surpassed the Zacks Consensus Estimate by 5.4%. It currently has a Zacks Rank #2.
Merck has a long-term estimated growth rate of 10.1%. MRK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 16.8%.