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IDEXX (IDXX) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research
·5-min read

IDEXX Laboratories, Inc. IDXX is slated to report second-quarter 2022 results on Aug 2, before the market opens.

In the last reported quarter, the company’s earnings per share of $2.27 surpassed the Zacks Consensus Estimate by 0.9%. Moreover, earnings outpaced the consensus estimate in the trailing four quarters, the average beat being 9.62%.

Let’s take a look at how things have shaped up prior to this announcement.

Factors at Play

The Companion Animal Group (CAG) business is expected to have gained from consistent strong organic CAG Diagnostics recurring revenues backed by an increasing number of pet patients. With economies returning to pre-pandemic levels, we anticipate a rebound in the U.S. clinical visits to lead to substantial CAG Diagnostic recurring revenue gains in Q2. The CAG arm is also likely to gain from continued organic revenue growth in CAG diagnostic instruments, as it did in the prior quarter.

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Sales contributions from veterinary software and diagnostic imaging, including the benefits from the ezyVet acquisition, are likely to be advantageous for the business in the to-be-reported quarter. The company’s veterinary software is also expected to report strong growth for the second quarter on gains from PIMS placements. During the first quarter, the company achieved record global placements of more than 350 PIMS installations, with the majority of customers opting for a cloud-based solution. We believe the company’s efforts to expand cloud-based solutions are likely to have contributed significantly to second-quarter revenues.

We expect to see significant growth in IDEXX’s CAG premium instrument placements in Q2 on the continued rise in Catalyst and premium hematology placements. In the prior quarter, premium hematology placements totaled 1,924, indicating an impressive 101% growth year over year. Similar to the last reported quarter, we anticipate IDEXX to record robust sales contributions from Rapid Assay in Q2. Strong customer retention backed by the expansion of IDEXX 360 agreements is likely to have benefited the reference lab business within the CAG arm.

IDEXX Laboratories, Inc. Price and EPS Surprise

 

IDEXX Laboratories, Inc. Price and EPS Surprise
IDEXX Laboratories, Inc. Price and EPS Surprise

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

 

The Zacks Consensus Estimate for CAG revenues is pegged at $792 million, suggesting an improvement of 6.2% from the year-ago quarter’s reported figure.

IDEXX’ Water business is likely to have delivered impressive revenue performance in the upcoming quarter on strong price gains. The business is expected to have befitted from a continued increase in water testing demand across the world as the effects of the pandemic abate and economies gradually recover from the pandemic.

The Zacks Consensus Estimate for Water revenues is pegged at $38.1 million, suggesting a rise of 2.4% from the year-ago quarter’s reported figure.

Within the Livestock, Poultry and Dairy (LPD) arm, we expect revenue growth in Q2 to be impacted by lower African swine fever and core swine testing in China compared to the year-ago period. Apart from this, we expect a continued drop in human COVID testing revenues, similar to the first quarter, to hamper Q2 LPD sales performance.

The Zacks Consensus Estimate for LPD revenues is pegged at $30.6 million, suggesting a fall of 8.7% from the last reported quarter’s figure.

Q2 Estimates

The Zacks Consensus Estimate for the company’s second-quarter 2022 revenues is pegged at $865.02 million, suggesting a rise of 4.71% from the year-ago reported figure.

The Zacks Consensus Estimate for its second-quarter 2022 net earnings of $1.68, indicating a 28.2% decline from the year-ago reported figure.

What Our Model Suggests

Our proven model predicts earnings beat for IDEXX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company has an Earnings ESP of +17.95%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Alcon Inc. ALC has an Earnings ESP of +5.07% and a Zacks Rank of #1. Alcon is expected to release second-quarter 2022 results on Aug 16. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alcon’s long-term earnings growth rate is estimated at 14.4%. ALC’s earnings yield of 3.25% compared with the industry’s (8.98%).

Glaukos Corporation GKOS currently has an Earnings ESP of +2.27% and a Zacks Rank of #1. Glaukos is scheduled to release second-quarter 2022 results on Aug 3.

GKOS’ 2023 earnings growth rate is estimated at 15.2%.

BrainsWay Ltd. BWAY currently has an Earnings ESP of +33.33% and a Zacks Rank of #1. BrainsWay is expected to release second-quarter fiscal 2022 results on Aug 10.

BWAY’s 2023 earnings growth rate is estimated to be 16.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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