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Luminex (LMNX) Reports Q3 Loss, Misses Revenue Estimates

Zacks Equity Research

Luminex Corporation LMNX reported third-quarter 2019 loss of 12 cents per share (EPS), significantly wider than the Zacks Consensus Estimate of 3 cents per share. Notably, the company reported earnings of 4 cents per share in the year-ago quarter.

Revenues in Detail

Revenues came in at $78.7 million, missing the Zacks Consensus Estimate by 3.9%. However, the top line improved 8.6% on a year-over-year basis.

Total sample-to-answer franchise revenues grew 27% from the prior-year quarter.

Luminex Corporation Price, Consensus and EPS Surprise

 

Luminex Corporation Price, Consensus and EPS Surprise

Luminex Corporation price-consensus-eps-surprise-chart | Luminex Corporation Quote

Segmental Analysis

System Sales

Revenues at this segment totaled $15.2 million, surging 52% from the year-ago quarter.

Consumable Sales

This segment accounted for $13.4 million of revenues, up 14.9% year over year.

Royalty Revenues

Royalty revenues totaled $12.9 million, up 7.5% on a year-over-year basis.

Assay Revenues

This segment reported revenues worth $29.5 million, down 12.7% on a year-over-year basis.

Service Revenues

Revenues in the segment amounted to $5.3 million, up 77.4% from the year-ago quarter.

Other

Other revenues came in at $2.3 million, up 16.2% from a year ago.

Business Details

Per management, this Texas-based company placed 31 sample-to-answer molecular systems under contract during the third quarter. Active sample-to-answer customers totaled 650 in the quarter under review.

Financial Update

As of Sep 30, 2019, cash and cash equivalents totaled $66.1 million, down 4.4% sequentially.

Cash flow from operating activities for the three months ended Sep 30, 2019, came in at $9.4 million, down 37.7% from the year-ago quarter.

Margins

Gross profit in the reported quarter was $41.8 million, down 5.5% year over year. Gross margin was 53.2%, contracting 790 bps.

Research and development expenses totaled $13.3 million, up 10.6% year over year. Selling, general and administrative expenses in the third quarter were $31.4 million, up 19.4% year over year. Total operating expenses amounted to $47.6 million, up 17.4% from the year-ago reported figure.

The company incurred operating loss of $5.7 million, against the year-ago quarter’s operating income of $3.8 million.

Guidance Revised

The company revised 2019 revenue outlook, which is now estimated to range between $334 and $337 million (down from the previously guided range of $337-$343 million). The mid-point of the latest guidance of $335.5 million is slightly lower than the Zacks Consensus Estimate of $340.6 million.

In Conclusion

Luminex exited the third quarter on a weak note. The company continues to gain from its flagship ARIES and VERIGENE platforms that currently have a strong customer base. Revenues at System sales, Consumable Sales and Service revenues also improved significantly. Management remains optimistic about the acquisition of the flow cytometry asset of MilliporeSigma.

During the third quarter, ARIES MRSA Assay received FDA 510(k) clearance. Moreover, the company submitted VERIGENE II Gastrointestinal Flex Assay to the FDA and anticipates submitting VERIGENE II Respiratory Flex Assay to the FDA by the end of 2019.

Meanwhile, the company’s assay revenues declined in the reported quarter. Contraction in gross margin adds to woes.

Zacks Rank

Currently, Luminex carries a Zacks Rank #3 (Hold).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks that reported solid results this earning season are Edwards Lifesciences EW, Thermo Fisher Scientific Inc. TMO and ResMed Inc. RMD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Edwards Lifesciences delivered third-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Third-quarter net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%.

ResMed reported third-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.

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