Shares of OraSure Technologies (OSUR 3.44%), a medical devices company that makes diagnostic testing kits, were jumping 12.5% higher as of 3:28 p.m. ET on Wednesday. The big gain came after the company reported its 2022 fourth-quarter results following the market close on Tuesday.
OraSure announced net revenue in the fourth quarter of $123.1 million, up 94% year over year. The company recorded earnings of nearly $15.6 million, or $0.21 per share, based on generally accepted accounting principles (GAAP). It also posted non-GAAP (adjusted) earnings of over $26 million, or $0.36 per share. The consensus estimate was for a net loss in Q4 of $0.01 per share.
The company also projected 2023 first-quarter revenue of between $125 million and $130 million. The midpoint of this range reflects a year-over-year increase of 88.5%. OraSure didn't provide full-year guidance for 2023. However, it stated that lower sales are anticipated in the second half of the year as it works down existing COVID-19 contracts with governments.
One positive quarterly update doesn't mean that things are all sunshine and roses for OraSure. The Q4 earnings beat reflects some painful moves made to transform the business. In particular, OraSure restructured by combining its molecular solutions and diagnostics business units into one organization. It also cut non-production staffing by 11%.
However, the company does now appear to be on the right track. CEO Carrie Eglinton Manner even said that OraSure expects its core business to achieve cash-flow-breakeven by the end of 2024.
OraSure is transitioning to a world that is less reliant on COVID-19-related products. However, COVID-19 revenue won't completely go away. The company recently won two new contracts with the U.S. government for its IntelliSwab COVID-19 rapid tests. The first deal for 18 million tests extends through November 2023 while the second contract is for at least 3.6 million additional tests.