) reported third quarter 2013 adjusted EPS of 26 cents, beating
the Zacks Consensus Estimate of 25 cents and up 8.33% year over
year. However, considering the one-time items, reported EPS came
in at 17 cents in the third quarter of 2013, registering a rise
of 41.6% over the prior-year quarter figure of 12 cents.
Revenues in Detail
Adjusted net sales in the quarter amounted to $323.8 million, up
6% year over year (up 7% at constant exchange rates or CER) and
ahead of the Zacks Consensus Estimate of $320 million. The
outperformance was primarily on the back of strong sales growth
across all geographic regions and customer classes.
Among the product categories,
Consumables and related revenues
(accounting for 88% of net sales) increased 8% year over year at
(accounting for the rest) were led by double-digit CER growth in
Molecular Diagnostics, supported by increasing revenues from
multi-year reagent rental agreements of the QIAsymphony
automation system placements. Instrument sales were higher in
Applied Testing, partially offset by lower sales in Pharma and
Academia, mainly due to reduced funding in life sciences
Geographic Regions in Detail
Region wise, the Americas (50% of revenues) witnessed 8% sales
growth at CER, owing to higher sales in Brazil and Mexico. Sales
in the U.S. were stable as lower sales of products used for HPV
(human papillomavirus) screening were offset by growth in the
rest of the product portfolio.
Revenues from Europe-the Middle East-Africa (30%) and
Asia-Pacific/Japan (19%) increased 4% and 7%, respectively, at
CER. China, India and Taiwan recorded robust sales, while in
Japan the figure remained unchanged. The top 7 emerging markets
accounted for 15% of revenues and registered sales growth of 38%
Segments in Detail
Qiagen primarily generates revenues from Molecular Diagnostics,
Applied Testing, Pharma and Academia, which represented 51%, 8%,
19% and 22% of adjusted net sales, respectively, during the
quarter. Molecular diagnostics sales registered a 10% increase at
CER as the QIAsymphony automation platform broke through 1,000
installed systems. Sales derived from Applied Testing climbed 6%
at CER, the increase originating from both consumables and
Sales also improved in Asia Pacific and Japan. Pharma sales
were up 3% at CER, with high sales of consumables being partially
neutralized by declining figures in instruments. Academia sales
were up only 2%, at CER due to weakening of the U.S. market.
However, healthy revenues from China and the Asia Pacific region
propelled growth during the quarter.
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Gross profit rose to $210 million in the third quarter of 2013 as
against $199 million in the year ago quarter. Gross margin
contracted 20 basis points at 65.2% as against 65.4% in the year
Operating income in the third quarter of 2013 was $43.4 million
as compared to $48.5 million in the year-ago quarter, a fall of
10.58% year over year. Operating margin in the reported quarter
was 25.9% from the year ago figure of 32.2%.
Adjusted operating income increased 5% year over year to $87.7
million. Adjustments involved excluding restructuring and
acquisition-related costs, share-based compensation and
amortization of intangible assets. The adjusted operating income
margin stood at 27.1% of adjusted net sales as compared to 27.5%
in the year-ago quarter.
The company exited the quarter with cash and cash equivalents and
short term investments of $355 million as on Sep 30, 2013,
against $484 million as on Dec 31, 2012, reflecting a downfall of
QIAGEN launched a $100 million share repurchase program during
the quarter. The first $10 million tranche was completed in early
October with the repurchase of 483,576 shares on the Frankfurt
QIAGEN reiterated its fiscal 2013 outlook. The company still
expects adjusted net sales to rise by 5% at CER. Sales growth is
expected to be impacted by volatile currency in the U.S. The
company also reaffirmed its 2013 EPS guidance at $1.13 (same as
that provided on Jul 30, 2013). The Zacks Consensus Estimate for
sales is $1305 million for FY13 and EPS stood at $1.02,
For the fourth quarter of 2013, the company expects adjusted
sales growth of 6% at CER and adjusted EPS of $0.35. The Zacks
Consensus Estimate of the same are $355 million and $0.34
Qiagen has been continually undertaking several strategic
initiatives in the global Sample & Assay Technologies market
to deliver an impressive performance in the near term. The
company is consistently focusing on innovation and geographic
expansion to drive organic growth. Additionally, the acquisition
of CLC bio demonstrates QIAGEN's keen interest to emerge as a
forerunner in next-generation bioinformatics.
Currently, the stock carries a Zacks Rank #3 (Hold).Other stocks
that appear impressive include
AMAG Pharmaceuticals, Inc.
), each carrying a Zacks Rank #1 (Strong Buy) and
) carrying a Zacks Rank #2 (Buy).