Yahoo Finance Why Is QuidelOrtho (QDEL) Down 2.4% Since Last Earnings Report?
A month has gone by since the last earnings report for QuidelOrtho (QDEL). Shares have lost about 2.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is QuidelOrtho due for a breakout? 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 catalysts.
QuidelOrtho Q1 Earnings Beat Estimates, Margins Fall
QuidelOrtho Corporation (QDEL) delivered adjusted earnings per share (EPS) of 44 cents in the first quarter of 2024, down by 75.6% year over year. However, the figure beat the Zacks Consensus Estimate by 1 cent.
The adjustments include expenses related to the amortization of intangibles, and acquisition and integration costs, among others.
GAAP loss per share for the quarter was $25.50 against the year-ago quarter EPS of 73 cents.
Revenues in Detail
QuidelOrtho registered revenues of $711 million in the first quarter, which decreased 16% year over year on a reported basis and 15.5% at constant exchange rate (CER). The figure beat the Zacks Consensus Estimate by 1.96%.
In the first quarter, QuidelOrtho’s total revenues, excluding COVID-19-related revenues, were $660.8 million (up 4.9% on a reported basis and 5.9% at CER).
In the first quarter, Respiratory revenues were $137.3 million (down 48.3%, both on a reported basis and at CER). Excluding government COVID-19 orders, respiratory revenues grew 6% both on a reported basis and CER.
Non-Respiratory revenues were $573.7 million (down 1.2% on a reported basis and 0.2% at CER). Excluding the one-time third-party collaboration settlement in the first quarter of 2023, non-respiratory revenue grew 3% on a reported basis and 4% in CER.
Segments in Detail
QuidelOrtho now derives revenues from four business units — Labs, Transfusion Medicine (TM), Point-Of-Care (POC) and Molecular Diagnostics (MDx).
In the first quarter, Labs revenues were $356.9 million, down 3.7% and 2.9% on a reported basis and at CER, respectively. Labs revenues grew approximately 4% year over year, excluding the one-time third-party collaboration settlement in the prior-year period.
TM revenues were $160.3 million in the first quarter, up 2.8% and 4.1% on a reported basis and at CER, respectively. The growth was driven by the company’s immunohematology reagent group across regions in the ORTHO VISION Swift and ORTHO VISION Max Swift instrument placements.
POC revenues amounted to $186.6 million in the first quarter, reflecting a decline of 39.4% and 39.3% on a reported basis and at CER, respectively. Excluding COVID-19 revenues, POC business grew approximately 38% year over year.
MDx revenues totaled $7.2 million in the first quarter, down 36.8% on a reported basis and 36.7% at CER. Excluding COVID-19 revenues, MDx business grew approximately 15% year over year.
Geographical Distribution
Geographically, QuidelOrtho derives revenues from North America, Europe, the Middle East and Africa (EMEA), China and Other regions (which includes Latin America, Japan and other Asia-Pacific markets).
Revenues from North America amounted to $433.9 million, reflecting a decline of 25.5% and 25.3% on a reported basis and at CER, respectively.
EMEA revenues amounted to $84.8 million, reflecting an uptick of 4.3% and 3.8% on a reported basis and at CER, respectively.
Revenues from China amounted to $76.1 million, reflecting an improvement of 7.8% on a reported basis and 12.1% at CER.
Revenues from Other regions amounted to $116.2 million, reflecting an uptick of 4.3% on a reported basis and 5.9% at CER.
Margin Trend
In the quarter under review, QuidelOrtho’s adjusted gross profit declined 25.8% to $337.9 million. The adjusted gross margin contracted 630 basis points (bps) to 47.5%.
Selling, marketing and administrative expenses increased 1.1% to $204.7 million. Research and development expenses declined 4.9% year over year to $59.2 million. Adjusted operating expenses were approximately flat year over year.
Adjusted operating income totaled $79.1 million, reflecting a 59% decline from the prior-year quarter’s level. Adjusted operating margin in the first quarter contracted 1170 bps to 11.1%.
Financial Position
QuidelOrtho exited first-quarter 2024 with cash and cash equivalents of $78.5 million compared with $118.9 million at the end of the fourth quarter. Total debt (including short-term debt) at the end of first-quarter 2024 was $2.40 billion compared with $2.41 billion at the fourth-quarter end.
Net cash used in operating activities at the end of first-quarter 2024 was $0.7 million against net cash provided of $188.9 million a year ago.
Guidance
Per management, QuidelOrtho has suspended its 2024 financial guidance while it assesses the business under its new president and chief executive officer. The company intends to resume providing guidance later in the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -100% due to these changes.
VGM Scores
At this time, QuidelOrtho has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 QuidelOrtho has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
QuidelOrtho belongs to the Zacks Medical - Products industry. Another stock from the same industry, Stryker (SYK), has gained 5.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Stryker reported revenues of $5.24 billion in the last reported quarter, representing a year-over-year change of +9.7%. EPS of $2.50 for the same period compares with $2.14 a year ago.
Stryker is expected to post earnings of $2.79 per share for the current quarter, representing a year-over-year change of +9.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.
Stryker has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
QuidelOrtho Corporation (QDEL) : Free Stock Analysis Report
Stryker Corporation (SYK) : Free Stock Analysis Report
