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Accuray (ARAY) Q1 Earnings Beat Estimates, Margins Down

Accuray (ARAY) registers growth in both Service and Product revenues during fiscal Q1.

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This story originally appeared on Zacks

Accuray Incorporated ARAY reported adjusted loss per share of a penny for the first quarter of fiscal 2022 against year-over-year break even earnings per share (EPS). Adjusted loss per share was narrower than the Zacks Consensus Estimate of a loss of 3 cents.

- Zacks

GAAP loss per share was 10 cents against the prior-year quarter’s break-even EPS.

Revenues in Detail

Accuray registered revenues of $107.4 million in the fiscal 2022 first quarter, up 25.9% year over year. The figure surpassed the Zacks Consensus Estimate by 16.7%.

Strength in Product revenues and robust year-over-year growth in Americas and China drove the overall top line in the quarter.

Segmental Details

Accuray derives revenues from two sources — Product and Services.

In the fiscal first quarter, Product revenues improved 68.8% from the year-ago quarter to $52.8 million. CyberKnife accounted for around 47% of revenue unit volume in the quarter whereas the TomoTherapy platform accounted for the remaining 53%.

Services revenues improved 1.1% from the year-ago quarter to $54.7 million.

Gross orders totaled $69.9 million, up 38.5% year over year.

Accuray Incorporated Price, Consensus and EPS Surprise

Accuray Incorporated Price, Consensus and EPS Surprise

Accuray Incorporated price-consensus-eps-surprise-chart | Accuray Incorporated Quote

Margin Trend

In the quarter under review, Accuray’s gross profit rose 11.6% to $39.5 million. Gross margin contracted 470 basis points (bps) to 36.8%.

Selling and marketing expenses rose 26.7% to $11.3 million. Research and development expenses went up 18.4% year over year to $14.4 million while general and administrative expenses went up 28.9% year over year to $11.5 million. Total operating expenses of $37.1 million increased 23.9% year over year.

Total operating profit totaled $2.4 million, reflecting a 55.9% decline from the prior-year quarter. Operating margin in the quarter contracted 416 bps to 2.2%.

Financial Position

Accuray exited first quarter of fiscal 2022 with cash and cash equivalents of $104.7 million compared with $116.4 million at the end of fiscal 2021. Total debt (including short-term debt) at the end of fiscal 2022 first quarter was $197.8 million compared with $173.8 million at the end of fiscal 2021.

2022 Guidance

Despite pandemic-led uncertainties, Accuray expects its total revenues for the year in the range of $420 million-$427 million, representing growth of 7% at the midpoint of the range from the comparable figure in fiscal 2021. This is in line with its revenue outlook that Accuray provided when it announced its preliminary first quarter fiscal 2022 financial results.

Our Take

Accuray exited the fiscal first quarter of 2022 with better-than-expected results. The company registered uptick in both its overall top line and its revenue sources during the period, which is encouraging. Receipt of the FDA’s 510(k) clearance for VOLO Ultra enhancement to the Accuray Precision treatment planning system for the Radixact System, followed by its full commercial launch, is impressive. Strong demand for the ClearRT Helical kVCT Imaging for the Radixact System and new integration with the RayStation treatment planning system for the CyberKnife M6 and S7 Systems raise our optimism on the stock.

However, year-over-year loss per share is worrying. Contraction of both margins also does not bode well.

Zacks Rank and Key Picks

Accuray currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are West Pharmaceutical Services, Inc. WST, Thermo Fisher Scientific Inc. TMO and Chemed Corporation CHE.

West Pharmaceutical, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Third-quarter revenues of $706.5 million outpaced the consensus mark by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently flaunts a Zacks Rank #1.

Chemed reported third-quarter 2021 adjusted EPS of $5.06, which surpassed the Zacks Consensus Estimate by 13.5%. Third-quarter revenues of $538.7 million outpaced the Zacks Consensus Estimate by 1.3%. It currently has a Zacks Rank #2.



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Accuray Incorporated (ARAY): Free Stock Analysis Report

 

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