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QuidelOrtho (QDEL) Up 3.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for QuidelOrtho (QDEL - Free Report) . Shares have added about 3.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is QuidelOrtho due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
QuidelOrtho Q2 Earnings Beat Estimates, U.S. Sales Down
QuidelOrtho Corporation reported an adjusted loss per share of 7 cents in the second quarter of 2024 against earnings per share of 26 cents in the year-ago period. However, the figure beat the Zacks Consensus Estimate by 66.7%.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
GAAP loss per share in the quarter was $2.20 compared with 80 cents in the year-ago quarter.
Revenues in Detail
QuidelOrtho registered revenues of $637 million in the second quarter, which decreased 4.2% year over year on a reported basis and 3.3% at a constant exchange rate (CER). However, the figure beat the Zacks Consensus Estimate by 3.2%.
In the second quarter, QuidelOrtho’s total recurring revenues, excluding COVID-19-related revenues, instrument revenues and U.S. Donor screening revenues, were $550.8 million (up 3.5% on a reported basis and 4.6% at CER). The company defines recurring revenue as revenues from sales of assays, reagents, consumables and services and excludes instruments.
In the second quarter, Respiratory revenues were $58 million (down 34.8%, both on a reported basis and at CER). Excluding COVID-19 revenues, respiratory revenues grew 18% in second-quarter 2024.
Non-Respiratory revenues were $579 million (up 0.5% on a reported basis and 1.6% at CER).
Segments in Detail
QuidelOrtho now derives revenues from four business units — Labs, Transfusion Medicine (TM), Point-Of-Care (POC) and Molecular Diagnostics (MDx).
In the second quarter, Labs revenues were $354.2 million, down 2% and 1% on a reported basis and at CER, respectively.
TM revenues were $161.3 million in the second quarter, down 1.2% on a reported basis but up 0.5% at CER.
POC revenues amounted to $117.1 million in the second quarter, reflecting a decline of 12.7% and 12.8% on a reported basis and at CER, respectively.
MDx revenues totaled $4.4 million in the second quarter, down 29% on a reported basis and 29.4% at CER.
Geographical Distribution
Geographically, QuidelOrtho derives revenues from North America, Europe, the Middle East and Africa (EMEA), China and Other regions (which includes Latin America, Japan and other Asia-Pacific markets).
Revenues from North America amounted to $350.1 million, reflecting a decline of 7.6% and 7.7% on a reported basis and at CER, respectively.
EMEA revenues amounted to $81.1 million, reflecting an uptick of 0.6% and 1% on a reported basis and at CER, respectively.
Revenues from China amounted to $81.6 million, reflecting an improvement of 0.4% on a reported basis and 4.1% at CER.
Revenues from Other regions amounted to $124.2 million, reflecting a decline of 0.2% on a reported basis and growth of 2.9% at CER.
Margin Trend
In the quarter under review, QuidelOrtho’s adjusted gross profit declined 7.2% to $281.5 million. The adjusted gross margin contracted 140 basis points (bps) to 44.2%.
Selling, marketing and administrative expenses increased 5.1% to $188.2 million. Research and development expenses declined 9.8% year over year to $56.3 million. Adjusted operating expenses were approximately flat year over year, however, the metric increased 200 bps as a percentage of revenue.
Operating loss totaled $117.5 million compared with $26.9 million in the prior-year quarter.
Financial Position
QuidelOrtho exited second-quarter 2024 with cash and cash equivalents of $107 million compared with $78.5 million at the end of the first quarter. Total debt (including short-term debt) at the end of second-quarter 2024 was $2.56 billion compared with $2.40 billion at the first-quarter end.
Cumulative net cash used for operating activities at the end of second-quarter 2024 was $98.6 million against net cash provided of $158.3 million a year ago.
Guidance
Per management, QuidelOrtho has suspended its 2024 financial guidance while it assesses the business under its new president and chief executive officer. However, the company expects its revenues and adjusted earnings per share to be at or slightly below the low end of its previously announced guidance during the fourth-quarter earnings call. Revenues and adjusted earnings per share are expected to be in the range of $2.76 billion-$3.07 billion and $2.40-3.07 per share, respectively.
The company expects its topline, excluding COVID-19 and U.S. Donor Screening revenues, to reflect mid-single-digit growth in 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -21.01% due to these changes.
VGM Scores
At this time, QuidelOrtho has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, QuidelOrtho has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
QuidelOrtho is part of the Zacks Medical - Products industry. Over the past month, Royal Philips (PHG - Free Report) , a stock from the same industry, has gained 9%. The company reported its results for the quarter ended June 2024 more than a month ago.
Philips reported revenues of $4.8 billion in the last reported quarter, representing a year-over-year change of -1.3%. EPS of $0.32 for the same period compares with $0.31 a year ago.
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QuidelOrtho (QDEL) Up 3.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for QuidelOrtho (QDEL - Free Report) . Shares have added about 3.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is QuidelOrtho due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
QuidelOrtho Q2 Earnings Beat Estimates, U.S. Sales Down
QuidelOrtho Corporation reported an adjusted loss per share of 7 cents in the second quarter of 2024 against earnings per share of 26 cents in the year-ago period. However, the figure beat the Zacks Consensus Estimate by 66.7%.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
GAAP loss per share in the quarter was $2.20 compared with 80 cents in the year-ago quarter.
Revenues in Detail
QuidelOrtho registered revenues of $637 million in the second quarter, which decreased 4.2% year over year on a reported basis and 3.3% at a constant exchange rate (CER). However, the figure beat the Zacks Consensus Estimate by 3.2%.
In the second quarter, QuidelOrtho’s total recurring revenues, excluding COVID-19-related revenues, instrument revenues and U.S. Donor screening revenues, were $550.8 million (up 3.5% on a reported basis and 4.6% at CER). The company defines recurring revenue as revenues from sales of assays, reagents, consumables and services and excludes instruments.
In the second quarter, Respiratory revenues were $58 million (down 34.8%, both on a reported basis and at CER). Excluding COVID-19 revenues, respiratory revenues grew 18% in second-quarter 2024.
Non-Respiratory revenues were $579 million (up 0.5% on a reported basis and 1.6% at CER).
Segments in Detail
QuidelOrtho now derives revenues from four business units — Labs, Transfusion Medicine (TM), Point-Of-Care (POC) and Molecular Diagnostics (MDx).
In the second quarter, Labs revenues were $354.2 million, down 2% and 1% on a reported basis and at CER, respectively.
TM revenues were $161.3 million in the second quarter, down 1.2% on a reported basis but up 0.5% at CER.
POC revenues amounted to $117.1 million in the second quarter, reflecting a decline of 12.7% and 12.8% on a reported basis and at CER, respectively.
MDx revenues totaled $4.4 million in the second quarter, down 29% on a reported basis and 29.4% at CER.
Geographical Distribution
Geographically, QuidelOrtho derives revenues from North America, Europe, the Middle East and Africa (EMEA), China and Other regions (which includes Latin America, Japan and other Asia-Pacific markets).
Revenues from North America amounted to $350.1 million, reflecting a decline of 7.6% and 7.7% on a reported basis and at CER, respectively.
EMEA revenues amounted to $81.1 million, reflecting an uptick of 0.6% and 1% on a reported basis and at CER, respectively.
Revenues from China amounted to $81.6 million, reflecting an improvement of 0.4% on a reported basis and 4.1% at CER.
Revenues from Other regions amounted to $124.2 million, reflecting a decline of 0.2% on a reported basis and growth of 2.9% at CER.
Margin Trend
In the quarter under review, QuidelOrtho’s adjusted gross profit declined 7.2% to $281.5 million. The adjusted gross margin contracted 140 basis points (bps) to 44.2%.
Selling, marketing and administrative expenses increased 5.1% to $188.2 million. Research and development expenses declined 9.8% year over year to $56.3 million. Adjusted operating expenses were approximately flat year over year, however, the metric increased 200 bps as a percentage of revenue.
Operating loss totaled $117.5 million compared with $26.9 million in the prior-year quarter.
Financial Position
QuidelOrtho exited second-quarter 2024 with cash and cash equivalents of $107 million compared with $78.5 million at the end of the first quarter. Total debt (including short-term debt) at the end of second-quarter 2024 was $2.56 billion compared with $2.40 billion at the first-quarter end.
Cumulative net cash used for operating activities at the end of second-quarter 2024 was $98.6 million against net cash provided of $158.3 million a year ago.
Guidance
Per management, QuidelOrtho has suspended its 2024 financial guidance while it assesses the business under its new president and chief executive officer. However, the company expects its revenues and adjusted earnings per share to be at or slightly below the low end of its previously announced guidance during the fourth-quarter earnings call. Revenues and adjusted earnings per share are expected to be in the range of $2.76 billion-$3.07 billion and $2.40-3.07 per share, respectively.
The company expects its topline, excluding COVID-19 and U.S. Donor Screening revenues, to reflect mid-single-digit growth in 2025.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -21.01% due to these changes.
VGM Scores
At this time, QuidelOrtho has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, QuidelOrtho has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
QuidelOrtho is part of the Zacks Medical - Products industry. Over the past month, Royal Philips (PHG - Free Report) , a stock from the same industry, has gained 9%. The company reported its results for the quarter ended June 2024 more than a month ago.
Philips reported revenues of $4.8 billion in the last reported quarter, representing a year-over-year change of -1.3%. EPS of $0.32 for the same period compares with $0.31 a year ago.