QIAGEN (QGEN) Q4 Earnings Beat Estimates, Margins Expand

QIAGEN N.V.’s QGEN fourth-quarter 2019 adjusted earnings per share (EPS) were 48 cents, up 20% year over year (up 20% at constant exchange rate or CER as well). The figure beat the Zacks Consensus Estimate by 9.1%. At constant exchange rate or CER, the quarter’s adjusted EPS was 48 cents as well.

Reported EPS for the quarter was 19 cents per share, down 26.9% year over year.

For 2019, adjusted EPS came in at $1.43, up 6.7% from the year-ago tally. The figure beat the Zacks Consensus Estimate by 2.1%.

Revenues in Detail

Net sales at actual rates in the fourth quarter rose 2.6% on a year-over-year basis to $413.5 million (up 4% at CER). Also, the top line beat the Zacks Consensus Estimate by 1.1%.

For 2019, revenues totaled $1.53 billion, up 2% (up 4% at CER) from the year-ago tally. The figure beat the Zacks Consensus Estimate by 0.7%.

QIAGEN N.V. Price, Consensus and EPS Surprise

 

QIAGEN N.V. Price, Consensus and EPS Surprise

QIAGEN N.V. price-consensus-eps-surprise-chart | QIAGEN N.V. Quote

Geographical Revenue Update

In the quarter under review, sales from the Americas (44% of revenues) totaled $180 million, up 6% on a reported basis (up 7% at CER). Revenues from Europe-Middle East-Africa (35% of revenues) rose 2% reportedly (up 5% at CER) to $146 million. Further, revenues from Asia-Pacific/Japan (21% of revenues) fell 4% year over year on a reported basis (down 4% at CER) to $87 million.

Segmental Details

As of the fourth quarter of 2019, QIAGEN has two major customer classes which are Molecular Diagnostics (that includes human healthcare including Precision Medicine and companion diagnostics) and Life Sciences (that includes Pharma and Academia/Applied Testing).

Molecular diagnostics (representing 48% of net sales) revenues were up 3% at CER to $198 million.

Life Sciences (52% of total revenues) reported revenues of $216 million, up 4% at CER. Sales derived from Applied Testing/Academia rose 3% at CER to $138 million. Pharma sales climbed 5% at CER in the fourth quarter to $78 million.

Operational Update

Gross profit in the quarter under review rose 5.6% to $279.6 million. Gross margin expanded 195 basis points (bps) to 67.6%.

Adjusted operating income (excluding items like acquisition-related intangible amortization) rose 18.5% year over year to $121.9 million in the fourth quarter. Adjusted operating margin expanded 397 bps to 29.5%.

Financial Update

QIAGEN exited 2019 with cash and cash equivalents of $623.6 million, down from $1.16 billion at the end of fiscal 2018. Cash flow from operating activities at the end of fiscal 2019 was $330.8 million compared with $359.5 million a year ago. Moreover, the company reported free cash flow of $212.9 million at the end of fiscal 2019, compared with $249.7 million a year ago.

2020 Guidance

QIAGEN has initiated its 2020 guidance. Total net sales growth is expected at about 3-4% at CER. The Zacks Consensus Estimate for 2020 revenues is pegged at $1.60 billion.

Adjusted EPS guidance for the full year is estimated in the band of $1.52-$1.54 at CER. The Zacks Consensus Estimate for 2020 EPS is pinned at $1.48.

Our Take

QIAGEN registered revenue growth across majority of its geographies and each of its operating segments in the fourth quarter. We are also upbeat about the company’s Sample to Insight portfolio progress in the quarter. Developments like QuantiFERON-TB’s high single-digit growth at CER and continued momentum of the QIAstat-Dx system are impressive. The expansion of the company’s next-generation sequencing solution portfolio buoys optimism. Expansion of both the margins is encouraging as well. On the flip side, escalation of operating costs and decline in APAC region revenues are concerning.

Earnings of Other MedTech Majors at a Glance

QIAGEN currently has a Zacks Rank of 4 (Sell).

Some better-ranked stocks, which reported solid results this earnings season, are Stryker Corporation SYK, Accuray Incorporated ARAY and AmerisourceBergen ABC. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Revenues of $4.13 billion surpassed the consensus estimate by 0.7%. The company carries a Zacks Rank #2 (Buy).

Accuray reported second-quarter fiscal 2020 adjusted EPS of a penny, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the Zacks Consensus Estimate by 0.3%. The company sports a Zacks Rank #1.

AmerisourceBergen reported first-quarter fiscal 2020 adjusted EPS of $1.76, which beat the Zacks Consensus Estimate of $1.67 by 5.4%. The Zacks Rank of 2 company has an expected long-term earnings growth rate of 7.4%.

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