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Why Is Luminex (LMNX) Up 15% Since Last Earnings Report?

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It has been about a month since the last earnings report for Luminex (LMNX - Free Report) . Shares have added about 15% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Luminex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Recent Earnings

Luminex Corporation reported second-quarter 2018 earnings of 15 cents per share, missing the Zacks Consensus Estimate of 19 cents. However, the figure rose 7.1% on a year-over-year basis.

Revenue in Detail

Revenues came in at $79.6 million, missing the Zacks Consensus Estimate of $80 million.

Revenues also increased 4.3% from the year-ago quarter driven by strength in the molecular diagnostic franchise.

Segmental Analysis

System Sales

Revenues in the segment came in at $11.8 million, up 19% from the year-ago quarter.

Consumable Sales

This segment accounted for $11 million of revenues, down 18% year over year.

Royalty Revenues

Royalty revenues came in at $11.6 million, up 7% on a year-over-year basis.

Assay Revenues

This segment posted revenues worth $40.2 million, increasing 6% on a year-over-year basis.

Service Revenues

Revenues in the segment totaled $3 million, down 9% from the year-ago quarter.

Other

Other revenues came in at $2 million, up 7% from a year ago.

Business Details

Luminex registered total sample-to-answer molecular product revenues of $14.2 million, surging 33% year over year.

The company placed 65 sample-to-answer molecular systems during the second quarter of 2018, up from 35 in the second quarter of 2017.

The company’s sample-to-answer utilization per VERIGENE customer grew 16% on a year over year basis to $108,000 in the quarter under review.

Further, utilization per ARIES customer grew 43% on a year-over-year basis to $53,000 in the quarter.

Luminex shipped 361 multiplexing analyzers in the quarter. These included MAGPIX systems, LX systems and FLEXMAP 3D systems.

Margins

Gross profit in the reported quarter was $49.3 million, down 1.5% year over year. Gross margin was 62%, which contracted 340 basis points (bps).

Operating expenses totaled $41.4 million, reflecting a drop of 2.7% on a year-over-year basis.

Research and development expenses in the quarter were $11.7 million, down 4.8% year over year.

Selling, general and administrative expenses in the quarter were $27.6 million, down 1.9% year over year.

Guidance

For 2018, Luminex reiterated its guidance.

The company expects revenues between $310 million and $316 million. The Zacks Consensus Estimate for 2018 revenues is pinned at $315.1 million, within the given range.

The company expects third-quarter revenues within $72.5-$74.5 million. Notably, the Zacks Consensus Estimate for revenues is pegged at $74.6 million for the third quarter, which is slightly above the given range.

 

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 -32.8% due to these changes.

VGM Scores

Currently, Luminex has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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. It's no surprise Luminex has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.




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