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OPKO Health (OPK) Q4 Earnings Match Estimates, Revenues Top
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OPKO Health, Inc. (OPK - Free Report) delivered an adjusted loss per share of 11 cents for the fourth quarter of 2022, flat compared with the year-ago period. The figure was also in line with the Zacks Consensus Estimate.
Our projection of loss per share was 13 cents.
Full-year loss per share was 46 cents, wider than a loss of 5 cents per share at the end of the comparable 2021 period. The metric was also wider than the Zacks Consensus Estimate of a loss of 45 cents per share.
Our projection of full-year loss per share was 46 cents, which matched the company-reported figure.
Revenues in Detail
OPKO Health registered revenues of $185.4 million in the fourth quarter, down 53.8% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 10.7%.
The fourth-quarter revenues compare to our estimate of $163.7 million.
Lower revenues from services dragged the overall top line.
Full-year revenues were $1 billion, reflecting a 43.4% plunge from the comparable 2021 period. The figure, however, surpassed the Zacks Consensus Estimate by 1.8%.
Our projection of full-year revenues was $982.5 million.
Segmental Revenues
OPKO Health manages its operations through two reportable segments – Diagnostics and Pharmaceuticals.
Within the Diagnostics arm, revenues from services amounted to $139.4 million in the reported quarter, down 61.6% year over year, primarily due to a fall in COVID-19 testing volume.
This compares to our projection of $123.3 million from services revenues in the fourth quarter.
BioReference Laboratories (BRL) processed approximately 0.1 million COVID-19 polymerase chain reaction tests in the fourth quarter of 2022, down 96.3% year over year.
Within the Pharmaceuticals arm, revenues from products rose 7.4% to $37.9 million, primarily on the back of sales in OPKO Health’s international operating companies and revenue from sales of RAYALDEE.
This compares to our projection of $34.4 million from products revenues in the fourth quarter.
Revenues from sales of RAYALDEE in the fourth quarter of 2022 were $9.1 million, up 18.2% from the prior-year period.
Revenues from the transfer of intellectual property and other totaled $8.1 million, up by 153.1% year over year.
This compares to our projection of $5.9 million of revenues from the transfer of intellectual property and other in the fourth quarter.
OPKO Health, Inc. Price, Consensus and EPS Surprise
In the quarter under review, OPKO Health’s gross profit fell 48.4% to $56 million. However, the gross margin expanded 317 basis points to 30.2%.
We had projected a gross margin of 23.3% for the fourth quarter.
Selling, general and administrative expenses fell 46.5% to $74 million. Research and development expenses declined 7.1% year over year to $19.5 million. Adjusted operating expenses of $93.5 million decreased 41.3% year over year.
Adjusted operating loss totaled $37.5 million compared with the prior-year quarter’s adjusted operating loss of $50.7 million.
Financial Position
OPKO Health exited full-year 2022 with cash and cash equivalents of $153.2 million compared with $134.7 million at the end of 2021.
Guidance
OPKO Health provided its financial outlook for the first quarter of 2023.
For the quarter, it expects its total revenues to be between $165 million and $185 million. The Zacks Consensus Estimate for the same currently stands at $170.6 million.
OPKO Health expects its revenues from services to be between $130 million and $140 million and revenues from product sales to be in the range of $30 million-$35 million. Other revenues are expected to be between $5 million and $10 million.
OPKO Health has also confirmed that it expects its COVID-19 testing volumes to continue to decline throughout 2023. However, management assumes modest growth in core testing volumes with stronger growth in OPKO Health’s higher-margin oncology, women's health and urology specialty lines of testing.
Our Take
OPKO Health exited the fourth quarter of 2022 with an in-line loss per share and better-than-expected revenues. The continued sales of OPKO Health’s NGENLA (somatrogon) by Pfizer Inc. in 15 countries, including Japan, Germany and the United Kingdom, looks promising. OPKO Health also confirmed that Pfizer expects to launch in all priority ex-U.S. markets by the year’s end and continues to work with the FDA to obtain approval in the United States. This raises our optimism about OPKO Health.
The company’s BRL progress with respect to its cost-cutting initiatives also bodes well for the stock. Robust results from the Pharmaceuticals segment, with solid sales of RAYALDEE, are impressive. The company’s continued strength in its women's health and oncology businesses also augurs well. The expansion of the gross margin bodes well.
However, the dismal top-line and bottom-line performances are concerning. Lower Diagnostics revenues and lower BRL testing volumes are also worrying. Management’s expectations of the continued decline of COVID-19 testing volumes throughout 2023 are discouraging from a business perspective. The persistent operating loss for OPKO Health also does not bode well for the company.
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 Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
BD, carrying a Zacks Rank #2 (Buy), reported first-quarter fiscal 2023 adjusted earnings per share (EPS) of $2.98, beating the Zacks Consensus Estimate by 11.6%. Revenues of $4.59 billion outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 7.8%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average being 6.5%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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OPKO Health (OPK) Q4 Earnings Match Estimates, Revenues Top
OPKO Health, Inc. (OPK - Free Report) delivered an adjusted loss per share of 11 cents for the fourth quarter of 2022, flat compared with the year-ago period. The figure was also in line with the Zacks Consensus Estimate.
Our projection of loss per share was 13 cents.
Full-year loss per share was 46 cents, wider than a loss of 5 cents per share at the end of the comparable 2021 period. The metric was also wider than the Zacks Consensus Estimate of a loss of 45 cents per share.
Our projection of full-year loss per share was 46 cents, which matched the company-reported figure.
Revenues in Detail
OPKO Health registered revenues of $185.4 million in the fourth quarter, down 53.8% year over year. The figure, however, surpassed the Zacks Consensus Estimate by 10.7%.
The fourth-quarter revenues compare to our estimate of $163.7 million.
Lower revenues from services dragged the overall top line.
Full-year revenues were $1 billion, reflecting a 43.4% plunge from the comparable 2021 period. The figure, however, surpassed the Zacks Consensus Estimate by 1.8%.
Our projection of full-year revenues was $982.5 million.
Segmental Revenues
OPKO Health manages its operations through two reportable segments – Diagnostics and Pharmaceuticals.
Within the Diagnostics arm, revenues from services amounted to $139.4 million in the reported quarter, down 61.6% year over year, primarily due to a fall in COVID-19 testing volume.
This compares to our projection of $123.3 million from services revenues in the fourth quarter.
BioReference Laboratories (BRL) processed approximately 0.1 million COVID-19 polymerase chain reaction tests in the fourth quarter of 2022, down 96.3% year over year.
Within the Pharmaceuticals arm, revenues from products rose 7.4% to $37.9 million, primarily on the back of sales in OPKO Health’s international operating companies and revenue from sales of RAYALDEE.
This compares to our projection of $34.4 million from products revenues in the fourth quarter.
Revenues from sales of RAYALDEE in the fourth quarter of 2022 were $9.1 million, up 18.2% from the prior-year period.
Revenues from the transfer of intellectual property and other totaled $8.1 million, up by 153.1% year over year.
This compares to our projection of $5.9 million of revenues from the transfer of intellectual property and other in the fourth quarter.
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 48.4% to $56 million. However, the gross margin expanded 317 basis points to 30.2%.
We had projected a gross margin of 23.3% for the fourth quarter.
Selling, general and administrative expenses fell 46.5% to $74 million. Research and development expenses declined 7.1% year over year to $19.5 million. Adjusted operating expenses of $93.5 million decreased 41.3% year over year.
Adjusted operating loss totaled $37.5 million compared with the prior-year quarter’s adjusted operating loss of $50.7 million.
Financial Position
OPKO Health exited full-year 2022 with cash and cash equivalents of $153.2 million compared with $134.7 million at the end of 2021.
Guidance
OPKO Health provided its financial outlook for the first quarter of 2023.
For the quarter, it expects its total revenues to be between $165 million and $185 million. The Zacks Consensus Estimate for the same currently stands at $170.6 million.
OPKO Health expects its revenues from services to be between $130 million and $140 million and revenues from product sales to be in the range of $30 million-$35 million. Other revenues are expected to be between $5 million and $10 million.
OPKO Health has also confirmed that it expects its COVID-19 testing volumes to continue to decline throughout 2023. However, management assumes modest growth in core testing volumes with stronger growth in OPKO Health’s higher-margin oncology, women's health and urology specialty lines of testing.
Our Take
OPKO Health exited the fourth quarter of 2022 with an in-line loss per share and better-than-expected revenues. The continued sales of OPKO Health’s NGENLA (somatrogon) by Pfizer Inc. in 15 countries, including Japan, Germany and the United Kingdom, looks promising. OPKO Health also confirmed that Pfizer expects to launch in all priority ex-U.S. markets by the year’s end and continues to work with the FDA to obtain approval in the United States. This raises our optimism about OPKO Health.
The company’s BRL progress with respect to its cost-cutting initiatives also bodes well for the stock. Robust results from the Pharmaceuticals segment, with solid sales of RAYALDEE, are impressive. The company’s continued strength in its women's health and oncology businesses also augurs well. The expansion of the gross margin bodes well.
However, the dismal top-line and bottom-line performances are concerning. Lower Diagnostics revenues and lower BRL testing volumes are also worrying. Management’s expectations of the continued decline of COVID-19 testing volumes throughout 2023 are discouraging from a business perspective. The persistent operating loss for OPKO Health also does not bode well for the company.
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 Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
BD, carrying a Zacks Rank #2 (Buy), reported first-quarter fiscal 2023 adjusted earnings per share (EPS) of $2.98, beating the Zacks Consensus Estimate by 11.6%. Revenues of $4.59 billion outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BD has a long-term estimated growth rate of 7.8%. BDX’s earnings surpassed estimates in all the trailing four quarters, the average being 6.5%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.