Yahoo Finance IDEXX (IDXX) Q1 Earnings Surpass Estimates, 2024 View Slashed
IDEXX Laboratories, Inc. IDXX posted first-quarter 2024 earnings per share (EPS) of $2.81, up 10.2% year over year. The figure surpassed the Zacks Consensus Estimate by 4.9%.
In the first quarter of 2024, comparable constant-currency EPS of $2.71 improved 8.8% year over year.
Revenues in Detail
First-quarter revenues increased 7.1% year over year (7% organically) to $964.1 million. However, the metric missed the Zacks Consensus Estimate by 0.1%.
The year-over-year upside was primarily driven by the 7% reported organic growth in Companion Animal Group (“CAG”) revenues.
CAG Diagnostics’ recurring revenues increased 7% on a reported basis and organic basis, supported by the sustained benefits of IDEXX execution drivers. 8% global premium instrument placement growth and continued high customer retention levels supported the 11% annual growth in IDEXX's global premium instrument installed base.
Veterinary software, services and diagnostic imaging systems’ revenues increased 12% on a reported basis and 8% organically, reflecting high recurring revenue growth and continued momentum in cloud-based software placements.
Segmental Analysis
IDEXX derives revenues from four operating segments — CAG, Water, Livestock, Poultry and Dairy (“LPD”) and Other.
In the first quarter, CAG revenues rose 7% on a reported and organic basis year over year to $889.3 million.
The Water segment’s revenues increased 11% (same organically) year over year to $43.1 million.
IDEXX Laboratories, Inc. Price, Consensus and EPS Surprise
IDEXX Laboratories, Inc. price-consensus-eps-surprise-chart | IDEXX Laboratories, Inc. Quote
For the first quarter, LPD revenues decreased 3% on a reported and organic basis to $28.2 million.
Revenues from the Other segment fell 26.8% on a reported basis to $3.5 million.
Margins
The gross profit in the first quarter rose 9.2% to $593.1 million. The gross margin expanded 120 basis points (bps) to 61.5% despite a 3.9% rise in the cost of revenues.
Sales and marketing expenses rose 1.1% to $149 million, while G&A expenses increased 31.3% to $92 million. R&D expenses rose 17.8% to $52.6 million. Overall, the operating profit in the reported quarter was $298.9 million, up 6.6% year over year. However, the operating margin in the quarter contracted 14 bps to 31%.
Financial Position
IDEXX exited the first quarter with cash and cash equivalents of $397.4 million compared with $453.9 million at the end of 2023. Total debt (including the current portion) was $695.8 million compared with $697.9 million at the end of 2023.
The cumulative net cash provided by operating activities was $198.6 million compared with $183.9 million in the prior-year comparable period.
2024 Guidance
IDEXX provided an updated outlook for 2024.
The company expects total revenues in the range of $3.895 billion-$3.965 billion (previously $3.930 billion-$4.040 billion). This suggests growth of 6.5%-8.5% (earlier 7.5%-10.5%) on a reported basis and 7%-9% (earlier 7%-10%) on an organic basis. The Zacks Consensus Estimate is currently pegged at $3.99 billion.
IDEXX guided full-year EPS in the range of $10.82-$11.20 (previously $10.84-$11.33). This updated guidance indicates reported growth of 8%-11% (earlier 8%-13%). The Zacks Consensus Estimate for full-year EPS is currently pegged at $11.13.
Our Take
IDEXX exited the first quarter of 2024 with earnings beating, while revenues missed estimates. The performance reflected continued high interest from customers in adopting the company’s innovative, multi-modality testing platforms and solutions. The expansion of the gross margin in the quarter is highly promising.
The company achieved strong global growth across all its testing modalities, including IDEXX VetLab consumables, Reference laboratory diagnostic and consulting services and Rapid assay products.
Meanwhile, solid LPD gains in the United States and Europe were offset by lower Asia Pacific revenues, including the impacts of reduced herd health screening levels. The reduced financial outlook for the full year is discouraging.
Zacks Rank and Key Picks
IDEXX Laboratories currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Medpace MEDP, Boston Scientific Corporation BSX and Encompass Health Corporation EHC.
Medpace, sporting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2024 EPS of $3.20, which beat the Zacks Consensus Estimate by 30.6%. Revenues of $511 million improved 17.7% from last year’s comparable figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace has an estimated 2024 earnings growth rate of 26.5% compared with the industry’s 12.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 12.8%.
Boston Scientific, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2024 EPS of 56 cents, which topped the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion outpaced the Zacks Consensus Estimate by 4.8%.
BSX has an estimated long-term earnings growth rate of 12.5% compared to the industry’s 10.9%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 7.5%.
Encompass Health, carrying a Zacks Rank #2, reported a first-quarter 2024 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 20.4%. Net operating revenues of $1.3 billion topped the Zacks Consensus Estimate by 3.6%.
EHC has an estimated long-term earnings growth rate of 15.6% compared with the industry’s 11.7% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 18.7%.
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