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Qiagen (NYSE:QGEN) is up 10.5% at 3:26 p.m. EDT after releasing solid third-quarter earnings with adjusted earnings per share beating management's guidance by $0.01.

Qiagen results: The raw numbers


Q3 2016 Actuals

Q3 2015 Actuals

Growth (YOY)


$338.7 million

$314.6 million


Operating income

$47.0 million

$46.2 million


Earnings per share




Data source: Company press release.

What happened with Qiagen this quarter?

  • Revenue growth was 9% at constant currencies, driven by its two largest product categories, molecular diagnostics and consumables, which both grew by 9% year over year at constant exchange rates.
  • About 3 percentage points of the constant exchange-rate sales growth came from the acquisitions of MO BIO and Exiqon. Subtracting that out, Qiagen saw 6% organic growth at constant currencies, which isn't too shabby because lower U.S. human papillomavirus (HPV) tests reduced revenue growth by 1 percentage point.
  • Operating income and earnings were lowered by restructuring charges. Backing those out, adjusted operating income increased 11%, and adjusted earnings per share was $0.29, 7.4% higher than the year-ago quarter.
  • As management said it would do, Qiagen cut back on spending, which increased adjusted operating margin to 26% in the third quarter compared to 21% in the second quarter, and an 18% operating margin in the first quarter.

What management had to say

In September, Illumina (NASDAQ:ILMN) got a preliminary injunction to stop Qiagen from selling its GeneReader next-generation sequencing system in the U.S., but Qiagen's CEO Peer Schatz said the company is developing a workaround to Illumina's patents: "We have accelerated development of selected chemistry components involved in GeneReader." Later, Schatz added that the company plans to relaunch in the U.S. next year and will "provide further information on this hopefully shortly."

On the potential to add to growth externally, Roland Sackers, Qiagen's chief financial officer, pointed out there are opportunities and pitfalls: "There's all this opportunities for attractive deals, but of course they have to be financially attractive." He also added, "M&A, as we said before, is part of our strategy."

Looking forward

Management is guiding for 8% year-over-year revenue growth in the fourth quarter at constant exchange rates. Adjusted earnings are expected to come in about $0.38 per share before subtracting further restructuring charges.

For next year, management thinks it can hit 6% to 7% growth in revenue at constant exchange rates, which would put adjusted earnings in the $1.25 to $1.27 per-share range, a nice bump from full-year 2016 guidance of $1.10 to $1.11 per share. Part of the guidance assumes that Qiagen will repurchase $300 million of its shares in 2017.

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