Accuray Incorporated ( ARAY Quick Quote ARAY - Free Report) reported earnings per share (EPS) of a penny for the third quarter of fiscal 2023 against the Zacks Consensus Estimate and the year-ago period loss of a penny per share.
We had projected the loss per share to be at a break-even level.
Revenues in Detail
Accuray registered revenues of $118.1 million in the third quarter of fiscal 2023, up 22.8% year over year. The figure topped the Zacks Consensus Estimate by 6.4%.
The fiscal third-quarter revenue compares to our estimate of $110.9 million.
The overall top-line growth was aided by robust geographical performances.
At the constant exchange rate (CER), net revenues were $122.1 million, representing a 27% increase from the prior-year period.
Accuray derives revenues from two sources — Products and Services.
In the fiscal third quarter, Product revenues improved 45.5% from the year-ago quarter to $62.8 million. This figure compares to our Product revenues’ fiscal third-quarter projection of $51.3 million.
At CER, Product revenues improved 50%.
Services revenues rose 4.2% from the year-ago quarter to $55.2 million. This figure compares to our Services revenues’ fiscal third-quarter projection of $59.6 million.
At CER, Services revenues were up 8%.
Gross product orders totaled $73.8 million, down 16.7% year over year. This figure compares to our gross orders’ fiscal third-quarter projection of $89.8 million.
At CER, gross product orders totaled $77 million.
In the quarter under review, Accuray’s gross profit rose 11.3% to $38.7 million. Gross margin contracted 337 basis points to 32.8%.
We had projected 38% of gross margin for the fiscal third quarter.
Selling and marketing expenses rose 3.1% to $11.1 million. Research and development expenses rose 0.7% year over year to $14.2 million, while general and administrative expenses went up 8.7% year over year to $11.1 million. Total operating expenses of $36.4 million increased 3.8% year over year.
Operating profit totaled $2.3 million in the fiscal third quarter against the prior-year quarter’s operating loss of $0.3 million.
Accuray exited the third quarter of fiscal 2023 with cash and cash equivalents of $89.1 million compared with $67.7 million at the end of the fiscal second quarter.
Total debt (including short-term debt) at the end of the fiscal third quarter was $178.5 million compared with $179.8 million at the end of the fiscal second quarter.
Accuray has reiterated its outlook for fiscal 2023 based on current expectations.
The company continues to expect its fiscal year revenues to be $447 million-$455 million, reflecting year-over-year growth at the midpoint of the range of 5%. The Zacks Consensus Estimate for the same is pegged at $449.2 million.
Accuray ended the third quarter of fiscal 2023 with better-than-expected results. The solid overall top-line and bottom-line performances were encouraging. Robust Product and Services revenues and geographical performances were impressive. Continued strong demand for Accuray’s Clear RT and Synchrony on Radixact and the CyberKnife S7 looks promising. During the reported quarter, the company set a new record for quarterly shipments and an increase in Accuray’s global installed base of customers were encouraging.
Per Accuray’s management, its partnership with GE Healthcare continues to advance on multiple commercial fronts, raising our optimism.
However, the decline in gross orders was disappointing. The gross margin contraction also does not bode well. The current global supply-chain shortages, forex woes and inflationary pressure are other challenges the company is navigating through, which is another concern.
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
Edwards Lifesciences Corporation ( EW Quick Quote EW - Free Report) , Intuitive Surgical, Inc. ( ISRG Quick Quote ISRG - Free Report) and Johnson & Johnson ( JNJ Quick Quote JNJ - Free Report) .
Edwards Lifesciences, carrying a Zacks Rank #2 (Buy), reported first-quarter 2023 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and broke even in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.
Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.