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Quidel (QDEL) Q3 Earnings Top Estimates, Margins Decline

Quidel (QDEL) records a strong Q3 performance despite lower revenues from two of its product categories.

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This story originally appeared on Zacks

Quidel Corporation QDEL delivered adjusted earnings per share (EPS) of $5.36 in the third quarter of 2021, down 7.3% year over year. The figure surpassed the Zacks Consensus Estimate by a stupendous 516.1%.

- Zacks

The adjustments include expenses related to amortization of intangibles and non-cash stock compensation expenses among others.

GAAP EPS for the quarter was $5.08, reflecting a 4.7% fall from the year-earlier figure.

Revenues in Detail

Quidel registered revenues of $509.7 million in the third quarter, up 7.1% year over year. The figure surpassed the Zacks Consensus Estimate by 0.6%.

The year-over-year revenue uptick was on the back of robust sales of COVID-19 diagnostic tests, led by QuickVue At-Home OTC COVID-19 Test, and strong sales of Sofia SARS and Lyra polymerase chain reaction (PCR) COVID-19 tests.

Total sales of COVID-19 products increased 7% year over year to $402.6 million whereas total sales of Influenza products were $13.8 million, up 53.3% from the year-ago period’s level.

Excluding COVID-19 and influenza products, revenues for the core business grew 2% year over year to $93.3 million.

Segments in Detail

Quidel derives revenues from four product categories — Rapid Immunoassay, Cardiometabolic Immunoassay, Molecular Diagnostic Solutions and Specialized Diagnostic Solutions.

In the third quarter, Rapid Immunoassay revenues rose 12.4% from the year-ago quarter’s level to $378.7 million, primarily driven by continued demand for Quidel’s Sofia SARS and QuickVue SARS antigen assays.

Cardiometabolic Immunoassay revenues were marginally down 0.03% year over year to $64.8 million. This included $30.3 million from the Triage business, which recorded decent growth in the U.S. and Europe regions while China saw a year-over-year decline due to continued shipping and supply-chain constraints.

Molecular Diagnostic Solutions revenues were $54.8 million, down 12.9% year over year due to a $14.3-million fall in sales of Lyra PCR assays for COVID-19 diagnosis. This was partially offset by incremental revenues from Quidel’s Solana SARS-CoV-2 assay.

Revenues from Specialized Diagnostic Solutions improved 1.6% year over year to $11.4 million, led by increased MicroVue specialty product sales.

Quidel Corporation Price, Consensus and EPS Surprise

Quidel Corporation Price, Consensus and EPS Surprise

Quidel Corporation price-consensus-eps-surprise-chart | Quidel Corporation Quote

Margin Trend

In the quarter under review, Quidel’s gross profit dipped 2.7% to $373.4 million. Gross margin contracted by 733 basis points (bps) to 73.3%.

Sales and marketing expenses rose 25% to $46.8 million. Research and development expenses went up 10.4% year over year to $23.7 million while general and administrative expenses climbed 28.7% year over year to $21.1 million. Adjusted operating expenses of $91.6 million increased 21.6% year over year.

Adjusted operating profit totaled $281.8 million, reflecting an 8.6% decline from the prior-year quarter’s level. Adjusted operating margin in the third quarter contracted a huge 948 bps to 55.3%.

Financial Position

Quidel exited the third quarter of 2021 with cash and cash equivalents of $578.4 million compared with $593.2 million at the end of the second quarter. Total debt (including short-term debt) at the end of the third quarter of 2021 was $0.7 million compared with $4.3 million at the end of the second quarter.

Our Take

Quidel ended the third quarter of 2021 with better-than-expected results. The company recorded strong Cardiometabolic Immunoassay and Specialized Diagnostic Solutions revenues, along with robust demand for Sofia SARS and QuickVue SARS antigen assays, and Solana SARS-CoV-2 assay, which is impressive. Strong sales of MicroVue specialty products are also encouraging. Quidel’s receipt of the CE Mark for Savanna multiplex molecular analyzer and Savanna RVP4 assay also raises our optimism on the stock. Availability of the company’s QuickVue At-Home OTC COVID-19 Test also bodes well for the stock.

Its dismal year-over-year bottom-line performance is concerning. Decline in revenues across its Cardiometabolic Immunoassay and Molecular Diagnostic Solutions product categories is discouraging as well. Contraction of both margins also does not bode well. The company not providing any financial outlook raises our apprehensions.

Zacks Rank and Key Picks

Quidel 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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Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report

 

Quidel Corporation (QDEL): Free Stock Analysis Report

 

West Pharmaceutical Services, Inc. (WST): Free Stock Analysis Report

 

Chemed Corporation (CHE): Free Stock Analysis Report

 

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