This article has been updated from a previous version to include comments made by Qiagen CEO Peer Schatz during an earnings call and information about Qiagen's 2017 financial guidance.
NEW YORK (GenomeWeb) – Qiagen said after the close of the market Wednesday that its third quarter revenues grew 8 percent year over year as the company beat analysts' consensus estimates on the top and bottom lines.
For the three months ended Sept. 30, Qiagen reported net sales of $338.7 million, besting the Wall Street estimate of $336 million. At constant exchange rates (CER), Q2 revenues increased 9 percent year over year, the company said.
Excluding an expected one percentage point of headwind from shrinking US HPV testing, net sales rose 10 percent at CER.
By customer class and at CER, molecular diagnostics — responsible for about half of the company's total sales — grew 9 percent year over year to $169 million.
"All regions grew in the third quarter, backed by gains in molecular diagnostics and life sciences customer classes, and in particular molecular diagnostics rising 12 percent on a CER basis when excluding US HPV test sales," Qiagen CEO Peer Schatz remarked during a conference call on Thursday recapping earnings.
In other customer classes and at CER, applied testing sales grew 12 percent to $31 million, pharma sales grew 8 percent to $66 million, and academia sales grew 7 percent to $73 million.
Consumables and related revenues comprised about 88 percent of sales and grew 9 percent at CER to $298 million, while instruments grew 3 percent to $41 million.
The company's R&D spending grew 2 percent to $36.2 million from $35.6 million in the same quarter a year ago, while SG&A spending rose 13 percent to $127.8 million from $113.3 million.
Qiagen's Q2 net income attributable to owners of the company was $33.8 million, or $.14 per share, compared to $33.9 million, or $.14 per share, in Q3 2015. On an adjusted basis, EPS was $.29, edging out the average analyst estimate of $.28 per share.
Qiagen finished the quarter with $354.6 million in cash and cash equivalents, and $109.7 million in short-term investments.
The company said in a statement that it plans to restructure, which will involve closing a Valencia, California site and spinning off certain activities at its Hombrechtikon, Switzerland site before closure. The restructuring will also entail "expanding the use of shared service centers and global centers of excellence to bring together activities at key locations; streamlining selected organizational structures to reduce complexity; realigning the roles of global and regional marketing teams and also creating new global centers of excellence for certain marketing functions; and optimizing sales channels to better engage with customers, including greater use of digital channels."
As a result, Qiagen anticipates a pre-tax restructuring charge of approximately $75 million (or about $.22-$.23 per share after taxes) in the fourth quarter of 2016, including approximately $35 million of non-cash items. Furthermore, the company anticipates pre-tax restructuring charges of approximately $10 million (or about $.03 per share after taxes) over the course of 2017.
"We are convinced these actions will help us support strong sales growth momentum and result in a significant increase in operating leverage," Schatz said during the conference call. He also noted the company is not anticipating a material change to the top line due to the discontinuation of any product lines.
For full-year 2016, Qiagen expects sales growth of 6 percent to 7 percent at CER over its FY 2015 revenues of $1.28 billion, which is based on achieving guidance provided in January 2016 for about 6 percent CER growth and the addition of about $10 million of first-time sales during the second half of the year from its acquisition of Exiqon. About one percentage point of total CER growth is expected from the company's December 2015 acquisition of Mo Bio, while about five percentage points of expected growth will be organic.
Qiagen also expects to achieve its previously announced full-year 2016 guidance for adjusted diluted EPS of about $1.10-1.11 CER on an underlying basis, but for adjusted results to be approximately $.87-.88 CER per share when including the expected restructuring charge of about $.22-.23 per share to be recorded in the fourth quarter.
Qiagen also provided an early look at expected 2017 earnings, noting that it expects sales growth of approximately 6 percent to 7 percent at CER with accelerated organic growth. Qiagen also said that it expects adjusted diluted EPS of approximately $1.25 to $1.27 per share at CER. The outlook for adjusted EPS is based on operating and financial leverage that include anticipated benefits from completing a planned $300 million in share repurchases in 2017 and its restructuring in 2016, but excludes an expected $.03 per share of restructuring costs to be taken in 2017.