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Accuray (ARAY) Q2 Earnings and Revenues Surpass Estimates

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·3 min read
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Accuray Incorporated ARAY reported earnings of 5 cents per share for second-quarter fiscal 2021. The Zacks Consensus Estimate was of a loss per share of 1 cent. However, the bottomline plunged 58.3% from the year-ago figure.

Revenue Details

For the fiscal second quarter, net revenues totaled $97.5 million, beating the Zacks Consensus Estimate by 4.9%.On a year-over-year basis, the top line, however,slid 1.3%.

Fiscal Q2 Details

Product Revenues: The metric fell 4.6% year over year to $41.8 million in the reported quarter.

Service Revenues: Revenues of $55.7 million from this segment were up 1.1% from the year-ago quarter.

Gross Order Update: Gross orders in the fiscal second quarter totaled $75.4 million, down 23.5% year over year.

Margins

Gross profit in the fiscal second quarter summed $40.8 million, up 7.7% on a year-over-year basis. Gross margin was 41.9%, highlighting an expansion of 355 basis points (bps) year over year.

Total operating expenses came in at $32.6 million, down 4.8%.

Operating profit for the fiscal second quarter was $8.2 million, up 126.3%. Operating margin came in at 8.4%, reflecting growth of 475 bps.

Accuray Incorporated Price, Consensus and EPS Surprise

Accuray Incorporated Price, Consensus and EPS Surprise
Accuray Incorporated Price, Consensus and EPS Surprise

Accuray Incorporated price-consensus-eps-surprise-chart | Accuray Incorporated Quote

Cash Position

The company exited second-quarter fiscal 2021 with total cash and cash equivalents of $107.3 million compared with $89.9 million at the end of the first quarter of fiscal 2021.

2021 Guidance

Considering the continued spread of the COVID-19 pandemic and its impact on the global economy as well as the healthcare industry causing uncertainty, management decided not to issue any financial guidance for 2021.

Our Take

Accuray exited the fiscal second quarter on a strong note. The company registered growth in Service revenues in the period. Also, solid demand for the Radixact, CyberKnife and TomoTherapy platforms steadily drives the top line.

Expansion of both margins is encouraging as well. Recently, the company got the 510(k) FDA clearance for the ClearRT Helical kVCT Imaging for the Radixact System and is gaining positive customer feedback for it. However, it saw a decline in Product revenues during the quarter. We are also concerned about the dip in gross order in the period.

Zacks Rank and Key Picks

Accuray currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks, which are likely to report earnings soon, are NextGen Healthcare, Inc. NXGN, IDEXX Laboratories, Inc. IDXX and Hologic, Inc. HOLX.

The Zacks Consensus Estimate for NextGen's third-quarter fiscal 2021 adjusted EPS is currently pegged at 25 cents. The consensus estimate for revenues stands at $140.9 million. Presently, the company carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

IDEXX currently carries a Zacks Rank #2. The Zacks Consensus Estimate for fourth-quarter 2020 adjusted EPS is currently pegged at $1.43. The consensus estimate for revenues stands at $677.5 million.

Hologic currently sports a Zacks Rank #1. The Zacks Consensus Estimate for first-quarter fiscal 2021 adjusted EPS is pegged at $2.14. The consensus estimate for revenues stands at $1.38 billion.

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