IDEXX Laboratories, Inc. (IDXX Quick QuoteIDXX - Free Report) posted third-quarter 2024 earnings per share (EPS) of $2.80, up 10.7% year over year. The figure surpassed the Zacks Consensus Estimate by 4.1%.

Comparable constant-currency EPS of $2.79 improved 12% year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Following the earnings announcement, IDXX stock fell 3.1% at the pre-market trading today.

IDEXX’s Revenues in Detail

Quarterly revenues increased 6.6% year over year (up 6% organically) to $975.5 million. The reported figure missed the Zacks Consensus Estimate marginally by 0.4%.

The year-over-year upside was primarily driven by a strong improvement in Companion Animal Group (“CAG”) and Water revenues.

Veterinary software, services and diagnostic imaging systems’ revenues increased 11% on a reported basis and 6% organically, reflecting high recurring revenue growth and continued momentum in cloud-based software placements.

IDEXX’s Segmental Analysis

IDEXX derives revenues from four operating segments — CAG, Water, Livestock, Poultry and Dairy (“LPD”), and Other.

CAG revenues rose 7% year over year on a reported basis and 6% on an organic basis to $892.0 million.

CAG Diagnostics’ recurring revenues, too, increased 7% on a reported basis and organically, supported by strong growth in international regions.

The Water segment’s revenues increased 13% year over year on a reported as well as organic basis to $50.2 million.

For the third quarter, LPD revenues declined 3% reportedly and 2% on an organic basis to $29.0 million.            

Revenues from the Other segment rose 5.5% on a reported basis to $4.4 million.

Margins

The gross profit rose 8.8% to $596 million. The gross margin expanded 124 basis points (bps) to 61.1% despite a 3.2% rise in the cost of revenues.

Sales and marketing expenses rose 7.8% to $146.3 million. G&A expenses surged 3.2% to $91.9 million.  R&D expenses rose 12.5% to $54 million. However, the operating profit in the reported quarter rose 10.4% year over year to $303.9 million. The operating margin in the quarter expanded 108 bps to 31.1%.

IDEXX’s Financial Position

IDEXX exited the third quarter with cash and cash equivalents of $308.6 million compared with $401.6 million at the end of the second quarter of 2024. Total debt (including the current portion) was $623.9 million compared with $694.9 million at the end of the second quarter of 2024.

The cumulative net cash provided by operating activities at the end of the third quarter was $667 million compared with $656.7 million in the prior-year period.

2024 Guidance

IDEXX provided an updated outlook for 2024.

The company expects total revenues to be in the range of $3,865 - $3,890 million (down from the previous guidance of $3,885-$3,945 million). This suggests growth of 5.5-6.2% (earlier 6.2-7.8%) reportedly and 5.3-6% (earlier 6.2-7.8%) on an organic basis. The Zacks Consensus Estimate is currently pegged at $3.91 billion.

IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise

IDEXX Laboratories, Inc. price-consensus-eps-surprise-chart | IDEXX Laboratories, Inc. Quote

IDEXX expects full-year EPS to be in the range of $10.37-$10.53 (earlier $10.31-$10.59 ). This updated guidance indicates reported growth of 3-5% (earlier 2-5%). The Zacks Consensus Estimate for full-year EPS is currently pegged at $10.44.

Our Take

IDEXX exited the third quarter on a mixed note, with earnings beating estimates but revenues missing the same. The performance reflected continued high customer demand in adopting the company’s innovative, multi-modality testing platforms and solutions. The expansion of both the margins in the quarter is highly promising.

The company achieved strong global growth across all its testing modalities, including IDEXX VetLab consumables, Reference laboratory diagnostic and consulting services and Rapid assay products.  

Meanwhile, lower Asia Pacific revenues offset solid gains in the United States and for poultry tests globally, including impacts from reduced swine testing and herd health screening levels. The reduced revenue outlook for the full year is discouraging. 

Zacks Rank & Key Picks

IDXX currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Phibro Animal Health (PAHC Quick QuotePAHC - Free Report) , Veracyte (VCYT Quick QuoteVCYT - Free Report) and HealthEquity (HQY Quick QuoteHQY - Free Report) .

Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 4.1%.

Veracyte, sporting a Zacks Rank #1 at present, posted second-quarter 2024 earnings of 30 cents per share, which beat the Zacks Consensus Estimate of a loss of 3 cents. Revenues of $114.4 million surpassed the Zacks Consensus Estimate by 14%.

VCYT has an estimated earnings growth rate of 115.7% for 2024 compared with the industry’s 13.7%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 328.4%.

HealthEquity, carrying a Zacks Rank #2 (Buy) at present, reported a second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.

HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.