Qiagen announced results for the third quarter on Wednesday afternoon, with results coming in pretty much where management had guided.
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Qiagen results: The raw numbers
Source: company press release.
What happened with Qiagen this quarter?
- Like pretty much every other international company reporting in U.S. dollars, Qiagen's sales were adversely affected by the stronger dollar. At constant exchange rates, revenue would have grown 2% instead of declining 7% and adjusted earnings per share would have been $0.02 higher.
- Sales of U.S. HPV tests continue to fall -- a whopping 44% year-over-year decline -- but because they've become such a small amount of sales -- just 3% of total sales in the third quarter -- it's easier for Qiagen to absorb the lost sales.
- Sales to academic labs increased 6% at constant currency. The growth is slightly less than the 7% at constant currency the segment experienced for the first nine months of the year. Illumina missed its guidance this quarter, citing a slowdown in spending, especially in Europe. Qiagen and Illumina don't compete directly, but they're subject to the same kinds of academic funding trends.
- Management reiterated revenue guidance for a 4% year-over-year increase at constant exchange rates. At that level, its products other than U.S. HPV tests are growing at 7% to 8% clip at constant exchange rates, which is reduced by 3 to 4 percentage points by the lower U.S. HPV test sales. Next year, the year-over-year comparison will be easier.
What management had to say"Our performance for the first nine months of 2015 has been largely in line with our expectations and has prompted us to reaffirm our full-year goal for adjusted net sales growth of approximately 4%" at constant exchange rates, Qiagen CFO Roland Sackers said. "Even in light of the adverse currency trends, we have been able to generate double-digit gains in free cash flow."
That last part is really important, because the cash will allow Qiagen to continue developing new products and take advantage of opportunities to make acquisitions such as the purchase of Enzymaticslast year.
Qiagen CEOPeer Schatz focused investors on how this year was setting up growth next year. "The benefits of these efforts will become even more apparent during 2016 as we put behind us the significant headwinds from the declining sales in the United States HPV test franchise," he said. "Indeed, this year is setting a good foundation for accelerating innovation and growth from our core portfolio."
Looking forwardIt's never fun to watch a company's core product suddenly falter because of competition, but Qiagen has done a good job deadening the blow. Any further fall in HPV sales will have a minimal impact on sales growth, allowing the products that are currently making up for the fall to actually add to the revenue growth.
The article Qiagen NV Earnings: Just What You'd Expect originally appeared on Fool.com.
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