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Haemonetics (HAE) Q1 Earnings & Revenues Beat Estimates

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Haemonetics Corporation (HAE - Free Report) reported adjusted earnings per share (EPS) of 59 cents in the first quarter of fiscal 2019, a 78.9% surge year over year. The bottom line also surpassed the Zacks Consensus Estimate of 42 cents.

On a reported basis, Haemonetics incurred net loss of 5 cents per share against net income of 38 cents a year ago.

Total Revenues

Revenues rose 8.7% year over year (up 7.2% at constant exchange rate or CER) to $229.3 million in the quarter under review. Moreover, the top line exceeded the Zacks Consensus Estimate of $220 million.

Revenues by Product Categories

At Plasma, reported revenues of $116.9 million (accounting for 50.9% of total revenues) were up 15.2% year over year (up 14% at CER).Plasma revenue growth in North America was 17.1% and included 15.3% growth in disposables along with strength in liquid solutions and software revenues.

Revenues at BloodCenter (28.1% of total revenues) dipped 1.7% (down 3.1% at CER) to $64.5 million.

Haemonetics Corporation Price, Consensus and EPS Surprise

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

Hospital revenues (contributing to 20.9% of total revenues) rose 9.3% (up 6.3% at CER) to $48 million. 

Margins

Haemonetics’ first-quarter adjusted gross margin was 47.2%, up 370 basis points (bps) year over year on favorable mix and currency.

Adjusted operating income was $5.3 million in the quarter under discussion, showing a 68.1% plunge year over year. While adjusted operating margin contracted 557 bps year over year to 2.3%.

Financial Position

Haemonetics exited the first quarter of fiscal 2019 with cash and cash equivalents of $192.1 million compared with $180.2 million at fiscal 2018-end.

The company generated operating cash flow of $23.1 million in the fiscal first quarter compared with $38.4 million in the year-ago period. The company also reported free cash flow (before restructuring and turnaround costs) of $6 million during the same compared with $28.9 million a year ago.. Capital expenditures summed $27.3 million in the period, higher than $12.7 million in the prior year.

Fiscal 2019 Guidance

Haemonetics reaffirmed its fiscal 2019 revenue guidance at CER. The company expects full-year revenue growth of 3-5%. Coming to segmental revenues, Plasma revenue rise is expected in the 7-10% band while Hospital revenues are estimated to increase 5-8%. However, Blood Center revenues are likely to decline 3-6%. The Zacks Consensus Estimate for next-year revenues is pegged at $947.7 million.

The company still predicts 2019 adjusted EPS in the range of $2-$2.30. The consensus estimate of $2.24 is within this guided range.

Our Take

Haemonetics exited first-quarter fiscal 2019 on a promising note. Per the company, year-over-year growth was backed by a solid execution of the company’s multi-year turnaround strategy. Continued momentum in new business generation and a geographical expansion have helped the company deliver strong results. However, we are upset with the company’s sluggish Blood Center business moderating overall growth despite an encouraging progress in the Plasma and Hospitals.

The company also seems to be upbeat about the receipt of some major regulatory clearances for the Plasma business. Moreover, the company’s strong cash position boosts investors’ confidence.

Zacks Rank & Other Key Picks

Haemonetics has a Zacks Rank #2 (Buy). A few other top-ranked stocks in the broader medical sector having reported solid results this earnings season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Align Technology, Inc. (ALGN - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Align Technology carry a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here.

Intuitive Surgical reported second-quarter 2018 adjusted earnings per share (EPS) of $2.76, beating the Zacks Consensus Estimate of $2.48. Revenues totaled $909.3 million, also surpassing the consensus estimate of $870 million.

Chemed reported second-quarter 2018 adjusted EPS of $2.81, which trumped the Zacks Consensus Estimate of $2.68. Revenues of $441.8 million edged past the Zacks Consensus Estimate of $432.3 million.

Align Technology posted second-quarter 2018 adjusted EPS of $1.30, breezing past the Zacks Consensus Estimate of $1.09. Revenues came in at $490.3 million, outpacing the consensus mark of $462.9 million.

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