) reported loss of 22 cents per share in the second quarter of
2013, a huge decline compared to the year-ago quarter earnings
per share (EPS) of 14 cents. However, after adjusting for certain
one-time items (other than stock-based compensation), adjusted
EPS was 24 cents in the quarter, beating the Zacks Consensus
Estimate and the prior-year quarter results by a penny each.
Adjusted net sales in the quarter stood at $316.4 million, up
3% year over year (up 3% at constant exchange rates or CER) and
were ahead of the Zacks Consensus Estimate of $312 million. This
result was mainly backed by balanced sales growth across all
regions as well as strong sales in Molecular Diagnostics, Pharma
and Applied Testing customer classes. Moreover, Ingenuity
(acquired Apr 29, 2013) and AmniSure (acquired May 3, 2012)
contributed to growth at CER.
Under the product categories, Consumables and related revenues
(accounting for 87% of net sales in the quarter) increased 5%
year over year at CER. Instrumentation revenues (accounting for
the rest) posted a disappointing result with an 8% decline at
CER, primarily due to the transition of Molecular Diagnostics
customers to reagent rental agreements for QIAsymphony automation
system placements, where revenues are recognized over a
multi-year period. Moreover, lower capital spending trends in
Pharma, Applied Testing and Academia affected revenue growth.
Region wise, Americas (48% of revenues) witnessed 2% sales
growth due to strong contribution from 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 (32% of sales) and
Asia-Pacific /Japan (19% of sales) increased 2% and 8%,
respectively, at CER. The company witnessed double-digit sales
growth in China, India and Singapore.The company noted a 12%
increase in sales in the top 7 emerging markets, representing 13%
of total sales.
Qiagen primarily generates revenues from molecular
diagnostics, applied testing, pharma and academia, which
represented 49%, 8%, 20% and 23% of total sales, respectively,
during the quarter. Molecular diagnostics sales registered a 4%
increase at CER.Sales derived from applied testing declined 4% at
CER, primarily due to tough comparison against 28% CER sales
growth in the year-ago quarter, which included contributions from
the 2012 launch of the QIAsymphony automation platform's
application package. Pharma and Academia sales were up by 4% and
3%, respectively, at CER.
Qiagen implemented several strategic initiatives in the global
Sample & Assay Technologies market to deliver a stronger
performance in 2013 and beyond. The company is focusing on
innovation and geographic expansion to drive organic growth.
Qiagen reiterated its fiscal 2013 outlook. The company expects
adjusted net sales to rise by 5% at CER. The sales growth will be
mainly on the back of the recent acquisition of Ingenuity, which
is expected to contribute $15 million to the company's annual
adjusted net sales.
However, this is expected to be offset by reduced government
funding including the implementation of sequestration in the
U.S., which will likely have an adverse impact of a minimum of 1
percentage point on adjusted net sales growth. Qiagen 2013 EPS
guidance remained at $1.13. This guidance takes into account
dilution of 3 cents per share related to the Ingenuity
Qiagen also provided its third quarter 2013 guidance. For the
quarter, the company expects adjusted net sales to grow 6% at CER
and with adjusted EPS of 27 cents.
Companion diagnostics is currently gaining significant
traction and peers like
) are establishing themselves as strong players in this market.
However, Qiagen is adopting an aggressive acquisition strategy to
widen its scope and strengthen its position in the competitive
landscape compared with other major players. Qiagen currently
retains a Zacks Rank #3 (Hold).
Other Stocks to Consider
While we prefer to remain on the sidelines on Qiagen, other
medical device stocks worth a look are
). Both these stocks carry a Zacks Rank #1 (Strong Buy).
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QIAGEN NV (QGEN): Free Stock Analysis Report
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