Qiagen (QGEN 1.62%), the molecular testing and lab supply company, started the year off with growth at the low end of its yearly guidance, although the first-quarter sales number was in line with where management expected to start the year.
Qiagen results: The raw numbers
|
Metric |
Q1 2018 |
Q1 2017 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$343.6 million |
$307.7 million |
12% |
|
Income from operations |
$47.9 million |
$23.8 million |
102% |
|
Earnings per share |
$0.14 |
$0.08 |
75% |
Data source: Qiagen.
What happened with Qiagen this quarter?
- Revenue growth benefited from changes in currency rates; looking at constant exchange rates, revenue was up 6%, which was at the high end of management's first-quarter guidance for year-over-year growth of 5% to 6%.
- Molecular diagnostics, which accounts for about half of the company's revenue, produced sales growth of 9% at constant exchange rates, boosted by the QuantiFERON-TB test, which grew by double digits at constant exchange rates. Increased sales of personalized healthcare and infectious disease testing products also helped boost the segment.
- While much smaller, the pharma segment grew 8% year over year at constant exchange rates, while academia and applied testing were the laggards at 3% and flat growth, respectively.
- The company launched QIAstat-Dx in Europe after announcing the acquisition of STAT-Dx a few months ago. The syndromic testing unit allows for the measurement of multiple markers, which can more quickly and accurately diagnose infections. The new machine isn't expected to produce meaningful sales until the second half of the year.
- Qiagen partnered with Natera to jointly develop cell-free DNA-based genetic tests for Qiagen's next-generation sequencing machine, the GeneReader, which should further boost its potential usefulness in diagnostic labs.
Image source: Qiagen.
What management had to say
As with any quarter, it's important to keep an eye on placements of the QIAsymphony machine, which runs a multitude of tests, because those tests result in recurring revenue, quarter after quarter. CEO Peer Schatz said the company is in good shape on that front:
We also saw a robust growth in placements of our flagship QIAsymphony automation platform even in light of 2017 having been the strongest year ever in terms of annual placements. We are on track to achieve our goal for more than 2,300 cumulative placements at the end of this year.
Schatz is quite excited about the potential for the QIAstat-Dx and its ease of adoption:
What makes QIAstat-Dx unique is that, such a complex workflow has been integrated into a completely self-contained cartridge, even including a sample loading bay. This makes the operation of this system very safe and simple with hands-on time of less than one minute. In fact, lab technicians can be trained to use QIAstat-Dx in probably less than 20 minutes.
Looking forward
Management reaffirmed its 2018 guidance for sales growth in the 6% to 7% range and adjusted earnings of about $1.31 to 1.33 per share, both at constant exchange rates.
As it was this quarter, the second-quarter sales growth will be a little below the expected 2018 average in the 5% to 6% range at constant exchange rates, while adjusted earnings are expected to be $0.31 to $0.32 per share, again at constant exchange rates. To meet its annualized goal, Qiagen will need to accelerate in the second half of the year; fortunately it has the QIAstat-Dx launch to help get it there.
