Shares of Avid Bioservices (CDMO -12.29%) were soaring 8.1% higher as of 10:50 a.m. EST on Thursday. The big jump came after the biologics contract development and manufacturing organization (CDMO) announced its fiscal 2021 second-quarter results following the market close on Wednesday.
Investors always love better-than-expected quarterly results, and that's exactly what Avid delivered.
The company reported second-quarter revenue of $21.1 million, up 15% year over year. Avid posted earnings of $800,000, or $0.01 per share; analysts expected a loss of $0.06 per share. In the prior-year period, the company recorded a loss of $0.03 per share.
The good news wasn't limited to the top and bottom lines. Avid announced better-than-expected profit margins and operating cash flow as well. CEO Nicholas Green attributed the strong performance to growth in customer demand.
It can be a mistake to place too much emphasis on one great quarter. But when that quarter is part of a continued positive trend, investors' enthusiasm is warranted. In this case, Avid's solid second-quarter results appear to be a sign of better things to come.
There's one clear indication that the future for the healthcare stock will improve: Avid upped its full-year revenue guidance to a range of $84 million to $88 million from its previous guidance of $76 million to $81 million. With the company's backlog at its highest level since becoming a dedicated CDMO, the next year should be a good one for Avid.