Yahoo Finance IDEXX (IDXX) Q4 Earnings Beat Estimates, Margins Increases
IDEXX Laboratories, Inc. IDXX posted fourth-quarter 2022 earnings per share (EPS) of $2.05, up 8.5% year over year. The figure surpassed the Zacks Consensus Estimate by 6.8%.
Comparable constant-currency EPS of $2.07 for the fourth quarter of 2022 reflected year-over-year growth of 14%.
For the full year, adjusted earnings were $8.03 per share, reflecting a 7% fall from the year-ago period. However, it beat the Zacks Consensus Estimate by 1.6%.
Our model projected an adjusted EPS of $1.86 for Q4 and $7.84 per share for full-year 2022.
Revenues in Detail
Fourth-quarter revenues grew 3% year over year to $828.6 million. Organically, growth was 7%. The metric exceeded the Zacks Consensus Estimate by 1.5%.
The fourth-quarter revenue compares to our estimate of $812.9 million.
IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise
IDEXX Laboratories, Inc. price-consensus-eps-surprise-chart | IDEXX Laboratories, Inc. Quote
The year-over-year upside was primarily driven by 4.1% reported and 7.9% organic growth in CAG Diagnostics’ recurring revenues. U.S. CAG Diagnostics’ recurring revenues increased 9.4% on a reported as well as organic basis.
Veterinary software, services and diagnostic imaging systems revenues increased 15% as reported and 17% organically, driven by double-digit growth in subscription-based service revenues and strong growth in new veterinary software system placements.
Total revenues for 2022 were $33.67 billion, reflecting a 4.7% rise from the year-ago period. The figure beat the Zacks Consensus Estimate by 0.9%.
Our model projected full-year 2022 revenue of $33.51 billion.
Segmental Analysis
IDEXX derives revenues from four operating segments — CAG, Water, Livestock, Poultry and Dairy (LPD) and Other.
In the fourth quarter, CAG revenues rose 4.1% on a reported basis (up 7.9% organically) year over year to $748.5 million. The Water segment’s revenues also grew 5.9% (up 9.5% organically) year over year to $39.3 million. However, LPD revenues dropped 1.7% on a reported basis (up 6.2% organically) to $33.4 million. Revenues in the Other segment fell 32.7% on a reported basis to $7.3 million.
Margins
Gross profit in the fourth quarter rose 6.2% to $484.9 million. Gross margin expanded 155 basis points (bps) to 58.5%.
Sales and marketing expenses rose 2.7% to $131.9 million, while general and administrative expenses dropped 0.1% to $83.4 million. Research and development expenses fell 4.2% to $43.4 million.
Overall, operating profit in the reported quarter was $226.2 million, reflecting a 13.5% rise year over year. The operating margin in the quarter expanded 243 bps to 27.3%.
Financial Position
IDEXX exited 2022 with cash and cash equivalents of $112.5 million compared with $144.5 million recorded at the end of 2021. Total debt (including the current portion) at the end of 2022 was $769.4 million compared with a total debt of $850.2 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of the fourth quarter of 2022 was $542.9 million compared with $755.5 million a year ago.
2023 Guidance
The company provided its full-year 2023 outlook.
For 2023, the company expects revenue growth in the range of $3,590-$3,690 million, indicating growth of 6.5-9.5% on a reported basis and organic growth of 7-10%. The Zacks Consensus Estimate for the same is currently pegged at $3.60 billion.
IDEXX’s full-year EPS guidance is now pegged in the range of $9.27-$9.75, indicating a rise of 16-21% on a reported basis. The Zacks Consensus Estimate for full-year EPS is currently pegged at $9.46.
Our Take
IDEXX exited the fourth quarter of 2022 on a decent note, with earnings and revenues beating estimates. The company registered year-over-year growth in revenues on both reported and organic basis. The top line was driven by continued benefits from the expansion of IDEXX's global premium instrument installed base. CAG Diagnostics’ organic recurring revenue growth reflects solid gains across IDEXX's major modalities globally, supported by growth in clinical service demand and expanded utilization of diagnostic products and services.
On the flip side, LPD revenues declined in the quarter on a reported basis. Further, inflationary pressure has been weighing on the bottom line.
Zacks Rank and Other Key Picks
IDEXX Laboratories currently carries Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Neogen Corporation NEOG, McKesson Corporation MCK and Hologic, Inc. HOLX.
Neogen, carrying a Zacks Rank #2, reported second-quarter fiscal 2023 adjusted EPS of 15 cents, beating the Zacks Consensus Estimate of a loss of 8 cents per share. Revenues of $230 million outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Neogen has an earnings yield of 2.5% compared with the industry’s 0.2%. NEOG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 70.11%.
McKesson, having a Zacks Rank #2, reported third-quarter 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 4.79%.
Hologic reported first-quarter 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 46.08%.
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