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IDEXX (IDXX) Q2 Earnings and Revenues Beat Estimates, View Up
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IDEXX Laboratories, Inc. (IDXX - Free Report) posted second-quarter 2023 earnings per share (EPS) of $2.67, a 71.2% surge year over year. The figure surpassed the Zacks Consensus Estimate by 9.9%.
In the second quarter of 2023, comparable constant-currency EPS of $2.70 improved a huge 76.5% year over year.
Revenues in Detail
Second-quarter revenues increased 9.7% year over year to $943.6 million. Organically, growth was 10%. The metric exceeded the Zacks Consensus Estimate by 1.7%.
The year-over-year upside was primarily driven by 11% reported organic growth in Companion Animal Group (“CAG”) revenues, and 10% reported and 9% organic growth in Water revenues.
IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise
CAG Diagnostics’ recurring revenues increased 11% on a reported basis and 12% on an organic basis, supported by double-digit organic revenue growth in the United States and international regions.
Veterinary software, services and diagnostic imaging systems’ revenues increased 12% on a reported basis and 13% organically, reflecting continued high growth in recurring revenues and strong quarterly placements of cloud-based software solutions.
Segmental Analysis
IDEXX derives revenues from four operating segments — CAG, Water, Livestock, Poultry and Dairy (LPD) and Other.
In the second quarter, CAG revenues rose 11% on a reported and organic basis year over year to $866.7 million. Our model projected the segment’s revenues to be $833.3 million for the second quarter.
The Water segment’s revenues increased 10% (up 9% organically) year over year to $43 million. This figure compares with our model’s segmental projection of $42.3 million for the second quarter.
For the second quarter, LPD revenues were flat on a reported basis (up 1% organically) to $29.9 million. Per our model, projected revenues from this segment were $32.3 million.
Revenues in the Other segment fell 45.2% on a reported basis to $4 million. This figure compares with our segmental projection of $7.2 million for the second quarter.
Margins
Gross profit in the second quarter rose 11.4% to $572.9 million. The gross margin expanded 97 basis points (bps) to 60.7%.
Sales and marketing expenses rose 7.9% to $141 million, while general and administrative expenses increased 10% to $89.7 million. R&D expenses dropped 62.3% to $46.5 million.
Overall, the operating profit in the reported quarter was $296.1 million, up 65.4% year over year. The operating margin in the quarter expanded 1058 bps to 31.4%.
Financial Position
IDEXX exited the second quarter of 2023 with cash and cash equivalents of $132.8 million compared with $112.5 million recorded as of Dec 31, 2022. The total debt (including the current portion) at the end of the second quarter of 2023 was $771.8 million compared with the total debt of $769.4 million at the end of the fourth quarter of 2022.
The cumulative net cash provided by operating activities at the end of the second quarter of 2023 was $384.2 million compared with $180.6 million a year ago.
2023 Guidance
IDEXX provided an updated outlook for the full-year 2023.
The company expects total revenues in the range of $3.660 billion-$3.715 billion (the earlier projection was in the band of $3.615 billion-$3.700 billion), indicating growth of 8.5%-10% on a reported and organic basis from the earlier projected growth of 7.5%-10%. The Zacks Consensus Estimate for the same is currently pegged at $3.66 billion.
IDEXX’s full-year EPS guidance is now pegged in the range of $9.64-$9.90 (from the previous band of $9.33-$9.75). This updated guidance indicates reported growth of 20%-23%, up from the previous projected growth of 16%-22%. The Zacks Consensus Estimate for the full-year EPS is currently pegged at $9.64.
Our Take
IDEXX exited the second quarter of 2023 surpassing both earnings and revenue estimates. Organic gains in CAG Diagnostics revenues reflected the solid demand for veterinary services and the benefits of IDEXX execution drivers.
The company’s commercial teams drove record second-quarter global premium instrument placements. The updated guidance for the full year buoys optimism. Further, the expansion of both margins in the quarter appears promising.
Meanwhile, the LPD segment’s revenues remained flat as solid gains in the United States were offset by lower herd health screening levels. Across IDEXX’s testing modalities, challenging macroeconomic conditions continued to pressure same-store clinical visit levels in the quarter.
Zacks Rank and Key Picks
IDEXX Laboratories currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported a second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported a second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported a second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 4.2%.
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IDEXX (IDXX) Q2 Earnings and Revenues Beat Estimates, View Up
IDEXX Laboratories, Inc. (IDXX - Free Report) posted second-quarter 2023 earnings per share (EPS) of $2.67, a 71.2% surge year over year. The figure surpassed the Zacks Consensus Estimate by 9.9%.
In the second quarter of 2023, comparable constant-currency EPS of $2.70 improved a huge 76.5% year over year.
Revenues in Detail
Second-quarter revenues increased 9.7% year over year to $943.6 million. Organically, growth was 10%. The metric exceeded the Zacks Consensus Estimate by 1.7%.
The year-over-year upside was primarily driven by 11% reported organic growth in Companion Animal Group (“CAG”) revenues, and 10% reported and 9% organic growth in Water revenues.
IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise
IDEXX Laboratories, Inc. price-consensus-eps-surprise-chart | IDEXX Laboratories, Inc. Quote
CAG Diagnostics’ recurring revenues increased 11% on a reported basis and 12% on an organic basis, supported by double-digit organic revenue growth in the United States and international regions.
Veterinary software, services and diagnostic imaging systems’ revenues increased 12% on a reported basis and 13% organically, reflecting continued high growth in recurring revenues and strong quarterly placements of cloud-based software solutions.
Segmental Analysis
IDEXX derives revenues from four operating segments — CAG, Water, Livestock, Poultry and Dairy (LPD) and Other.
In the second quarter, CAG revenues rose 11% on a reported and organic basis year over year to $866.7 million. Our model projected the segment’s revenues to be $833.3 million for the second quarter.
The Water segment’s revenues increased 10% (up 9% organically) year over year to $43 million. This figure compares with our model’s segmental projection of $42.3 million for the second quarter.
For the second quarter, LPD revenues were flat on a reported basis (up 1% organically) to $29.9 million. Per our model, projected revenues from this segment were $32.3 million.
Revenues in the Other segment fell 45.2% on a reported basis to $4 million. This figure compares with our segmental projection of $7.2 million for the second quarter.
Margins
Gross profit in the second quarter rose 11.4% to $572.9 million. The gross margin expanded 97 basis points (bps) to 60.7%.
Sales and marketing expenses rose 7.9% to $141 million, while general and administrative expenses increased 10% to $89.7 million. R&D expenses dropped 62.3% to $46.5 million.
Overall, the operating profit in the reported quarter was $296.1 million, up 65.4% year over year. The operating margin in the quarter expanded 1058 bps to 31.4%.
Financial Position
IDEXX exited the second quarter of 2023 with cash and cash equivalents of $132.8 million compared with $112.5 million recorded as of Dec 31, 2022. The total debt (including the current portion) at the end of the second quarter of 2023 was $771.8 million compared with the total debt of $769.4 million at the end of the fourth quarter of 2022.
The cumulative net cash provided by operating activities at the end of the second quarter of 2023 was $384.2 million compared with $180.6 million a year ago.
2023 Guidance
IDEXX provided an updated outlook for the full-year 2023.
The company expects total revenues in the range of $3.660 billion-$3.715 billion (the earlier projection was in the band of $3.615 billion-$3.700 billion), indicating growth of 8.5%-10% on a reported and organic basis from the earlier projected growth of 7.5%-10%. The Zacks Consensus Estimate for the same is currently pegged at $3.66 billion.
IDEXX’s full-year EPS guidance is now pegged in the range of $9.64-$9.90 (from the previous band of $9.33-$9.75). This updated guidance indicates reported growth of 20%-23%, up from the previous projected growth of 16%-22%. The Zacks Consensus Estimate for the full-year EPS is currently pegged at $9.64.
Our Take
IDEXX exited the second quarter of 2023 surpassing both earnings and revenue estimates. Organic gains in CAG Diagnostics revenues reflected the solid demand for veterinary services and the benefits of IDEXX execution drivers.
The company’s commercial teams drove record second-quarter global premium instrument placements. The updated guidance for the full year buoys optimism. Further, the expansion of both margins in the quarter appears promising.
Meanwhile, the LPD segment’s revenues remained flat as solid gains in the United States were offset by lower herd health screening levels. Across IDEXX’s testing modalities, challenging macroeconomic conditions continued to pressure same-store clinical visit levels in the quarter.
Zacks Rank and Key Picks
IDEXX Laboratories currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported a second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported a second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported a second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 4.2%.