) reported third quarter adjusted loss per share of 2 cents,
surpassing the Zacks Consensus Estimates of loss of 11 cents. It
recorded a loss of 32 cents per share in the prior year quarter.
CEPHEID INC (CPHD): Free Stock Analysis
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Adjusting for amortization expenses, Cepheid reported net income
of $6.6 million or 9 cents per share in the third quarter, from
net income of $0.9 million or 1 cent per share in the prior-year
Revenue in Detail
Revenues improved 24% year over year to $100.1 million in the
third quarter, edging past the Zacks Consensus Estimate of $94
million. It generated revenues of $80.5 million in the prior-year
This increase came on the back of strong market adoption of
GeneXpert Systems and broadening reach of the Xpert test
portfolio. Growth was also driven by higher-than-expected
revenues from High Burden Developing Countries (HBDC) and
improved performance in commercial clinical business.
Among the segments, the Clinical segment (up 36% year over year
to $91.9 million) consisting of Clinical Systems (up 34% to $17.5
million) and Clinical Reagents (up 36% to $74.4 million)
contributed about 91.8% to the total revenues in the reported
quarter. On the other hand, Cepheid's Non-Clinical & Other
business revenues dropped 36% year over year to $8.2 million.
On a geographic basis, product sales from the mainstay North
American market grew 8% year over year to $58.8 million whereas
the overseas market recorded a 57% year-over-year surge to $ 41.3
Cepheid's Clinical business successfully placed 133 GeneXpert
systems of the company Placements as part of the HBDC program
were a total of 441. Including the HBDC systems, a cumulative
total of 5,126 systems have been placed worldwide as of Sep 30,
Highlights of the Release
Adjusted gross margin was 49% in the reported quarter, down 300
basis points (bps) from the year-ago period. The margin
contraction was on account of unfavorable mix toward the lower
margin HBDC business.
Operating expenses amounted to $47.83 million, up 9% year over
year, on account of higher research and development expenses (up
15% year over year to $18.5 million) and higher sales and
marketing expenses (up 23.7% to $19.7 million). The expense
growth was partially offset by lower general and administrative
expenditure (down 19.3 % to $9.4 million). Adjusted operating
loss was $1.4 million in the quarter.
Cepheid exited the quarter with cash and cash equivalents of
about $68.7 million compared with $95.8 million at the end of
Cepheid updated its guidance for 2013 to reflect much stronger
than expected HBDC revenues and higher efficiency in
manufacturing operations. It expects revenues in the range of
$389-$391 million compared with the prior outlook of $375-$385
million. The current Zacks Consensus Estimate is pegged at $384
The company expects 2013 adjusted net loss per share (considering
the stock- based compensation as a regular expense) in the range
of 26-24 cents. Net income is expected to be in the range of
22-24 cents per share.
Other Upcoming Releases
MAKO Surgical Corp.
) expects to release its third quarter results on Nov 4, 2013.
The Zacks Consensus Estimate for the quarter stands at a loss of
12 cents per share.
Mindray Medical International Ltd
) expects to release third quarter results on Nov 4, 2013. The
Zacks Consensus Estimate for the quarter is 43 cents per share.
Echo Therapeutics, Inc.
) expects to release third quarter results. The Zacks Consensus
Estimate for the quarter is at a loss of 53 cents.
Cepheid is a leading molecular diagnostics company that is
dedicated to improving healthcare by developing, manufacturing
and marketing accurate yet easy-to-use molecular systems and
The slower than expected recovery in the North American market
was another downside in the quarter. Margin pressure as the HDBC
business picks up is another area of concern. Furthermore,
management expects the robust growth opportunities in the fourth
quarter on the back continued growth in emerging markets and the
new pipeline of products to be introduced by the company in the
Currently CPHD carries a Zacks Rank #2 (Buy).