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Luminex (LMNX) Beats Q1 Estimates on ARIES Platform Strength

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Luminex Corporation (LMNX - Free Report) reported first-quarter 2018 earnings of 25 cents per share, beating the Zacks Consensus Estimate of 22 cents. Further, earnings rose 13.6% on a year-over-year basis.

In the past six months, shares of Luminex have gained 16.1% against the industry’s decline of 8.7%.

Luminex carries a Zacks Rank #2 (Buy).

Revenue in Detail

Revenues came in at $82.7 million, beating the Zacks Consensus Estimate of $80 million. Revenues also increased 6.3% from the year-ago quarter on strength in the molecular diagnostic franchise.

Notably, in the first quarter, Luminex reported revenues worth $47.1 million in the molecular diagnostic unit, up 21% year over year. This was driven by sample-to-answer molecular product revenues, which totaled $16.5 million, up 49% from the year-ago quarter.

In the quarter under review, the company placed 60 sample-to-answer molecular systems under contract, compared to 34 in the prior-year quarter. Currently, total active sample-to-answer customers are just under 500.

Sample-to-answer utilization per customer grew to $105,000 and $51,000 from $90,000 and $33,000 per customer, for VERIGENE and ARIES, respectively.

Particularly, sales at the VERIGENE platform grew 40%, while the same at ARIES nearly tripled from the year-ago quarter.

 

Luminex Corporation Price, Consensus and EPS Surprise

 

Luminex Corporation Price, Consensus and EPS Surprise | Luminex Corporation Quote

 

Segment Analysis

System Sales

Revenues in the segment came in at $7.9 million, down 6.7% from the year-ago quarter.

Consumable Sales

This segment accounted for $11.9 million of revenues, down 22.8% year over year.

Royalty Revenues

Royalty revenues came in at $12.2 million, up 5.9% on a year-over-year basis.

Assay Revenues

This segment posted revenues worth $45.8 million, which increased 22.5% on a year-over-year basis. There was a 49% increase in the company’s automated products, while non-automated products saw a rise of 13%.

Service Revenues

Revenues in the segment totaled $2.9 million, down a nominal 1% from the year-ago quarter.

Other

Other revenues came in at $1.9 million, down 5.9% from a year ago.

Margins

Gross profit in the reported quarter was $53.6 million, up 1.5% year over year. Gross margin was 64.8%, which contracted 310 basis points (bps).

Operating expenses totaled $38.3 million, which reflects a drop of 1% on a year-over-year basis.

Operating profit was $15.3 million, up 8.9% from the prior-year quarter. Operating margin came in at 18.5%, up 50 bps.

Balance Sheet Details

Luminex’s balance sheet remains strong and debt-free. The company exited the quarter with cash and cash equivalents of $128.7 million.

Guidance

Luminex expects second-quarter revenues within $78.5-$80 million. Notably, for the second quarter, the Zacks Consensus Estimate for revenues is pegged at $80.2 million, which is slightly above the given range.

For 2018, the company expects revenues between $310 million and $316 million. The Zacks Consensus Estimate for 2018 revenues is pinned at $313 million, within the given range.

In Conclusion

Luminex ended the first quarter on a solid note, beating the Zacks Consensus Estimate for both the counts. Molecular diagnostic revenues drove the results. The company also rides on the solid ARIES and VERIGENE platforms. Assay and royalty revenues also witnessed an upside. New products in pipeline are likely to expand the company’s portfolio. Furthermore, a solid revenue guidance for 2018 buoys optimism. Falling operating expenses and expanding operating margins are major positives.

On the flip side, per management, the first quarter saw the lowest system placements. Gross margin contracted significantly, while system, consumable and service revenues declined on a year-over-year basis. A highly competitive life sciences industry adds to the woes.

Other Key Picks

Some other top-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.

Chemed posted first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.

Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.

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