Haemonetics (HAE) Q2 Earnings Top Estimates, 2024 View Up
Haemonetics Corporation HAE delivered adjusted earnings per share (EPS) of 99 cents in the second quarter of fiscal 2024, up 19.3% year over year. The bottom line surpassed the Zacks Consensus Estimate by 5.3%.
On a GAAP basis, the EPS was 48 cents compared with 64 cents in the prior-year quarter.
Total Revenues
Revenues increased 7% (up 7.6% on an organic basis) to $318.2 million in the second quarter of fiscal 2024. The top line missed the Zacks Consensus Estimate by 0.3%. The uptick was driven by growth across Plasma and Hospital segments.
Segments in Detail
At Plasma, revenues of $141.9 million (accounting for 44.6% of the total revenues) rose 11% year over year (up 10.7% on an organic basis) in the reported quarter. This compares with our model projection of $131 million for the quarter reported.
Revenues at Blood Center (21.4%) fell 7.6% (up 5.1% on an organic basis) to $68.1 million. This compares with our model projection of $59.1 million for the fiscal second quarter.
Hospital revenues (32.4%) rose 13.5% (up 14% on an organic basis) to $103.1 million. It was primarily driven by growth in Vascular Closure and Hemostasis Management. This compares with our model projection of $122.7 million for the said quarter.
Service revenues (1.6%) declined 0.2% (down 1.3% on an organic basis) to $5 million. This compares with our model projection of $5.7 million for the fiscal second quarter.
Margins
In the second quarter of fiscal 2024, the company-adjusted gross margin was 54%, up 30- basis points (bps) year over year. The primary drivers of the increase in the gross margin percentage were price, volume and mix, partially offset by inventory reserves, continuous growth investments and increased depreciation expenses.
Company-adjusted operating expenses in the second quarter of fiscal 2024 were 32.6% compared with 33.1% from the year-ago quarter. The downside in adjusted operating expenses, as a percentage of revenues, was primarily driven by operating leverage and lower freight costs, partially offset by continuous growth investments.
Haemonetics Corporation Price, Consensus and EPS Surprise
Haemonetics Corporation price-consensus-eps-surprise-chart | Haemonetics Corporation Quote
The company-adjusted operating income was $68.3 million in the quarter under discussion, up 12.8% year over year. The adjusted operating margin was 21.5%, up 110 bps from the year-ago quarter’s levels.
Financial Position
Haemonetics exited the fiscal second quarter with cash and cash equivalents of $351 million compared with $285.7 million at the end of the first quarter of fiscal 2024. The long-term debt at the end of the fiscal second quarter was $748.7 million, up from $754.1 million at the end of the first quarter of 2024.
The cumulative net cash flow from operating activities at the end of the second quarter of fiscal 2024 was $118.2 million compared with $129 million cash inflow from operating activities a year ago.
2024 Guidance
Haemonetics updated its outlook for fiscal 2024.
For 2024, the company expects total GAAP revenue growth in the range of 7-9% on a reported basis (earlier guidance was 6-9%). Organic revenue growth is anticipated at 8%-10% (earlier guidance was 7-10%). The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $1.26 billion.
HAE expects the full-year adjusted EPS in the band of $3.75-$3.95 ($3.60-$3.90). The Zacks Consensus Estimate for the same is pegged at $3.82.
Our Take
Haemonetics ended the second quarter of fiscal 2024 with better-than-expected earnings and revenues miss. Strong momentum in U.S. collections and prices drove the robust volume growth and price benefits in the Plasma business.
In the second quarter, the company continued to strengthen its momentum and industry leadership, delivering growth while broadening its global presence. Further, the planned acquisition of OpSens creates powerful opportunities for accelerated growth and diversification, and HAE is committed to supporting the long-term success of its businesses through continued strategic portfolio evolution and additional growth investments. Further, the raised 2024 outlook instills optimism in the stock.
However, the decrease in adjusted operating expenses as a percentage of revenue during the reported quarter was due to operating leverage and lower freight costs. The uncertain economic scenario continues to pose a challenge for Haemonetics. The stiff competition remains a concern.
Zacks Rank & Other Key Picks
Haemonetics carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Inari Medical NARI, Insulet PODD and Cencora, Inc. COR.
Inari Medical, carrying a Zacks Rank #2, reported a second-quarter 2023 adjusted EPS of 4 cents, beating the Zacks Consensus Estimate by a staggering 128.6%. Revenues of $119 million outpaced the consensus estimate by 2.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inari Medical has an estimated earnings growth rate of 725% for the next year. Inari Medical’s earnings surpassed estimates in all the trailing four quarters, the average being 66.8%.
Insulet, carrying a Zacks Rank #2, reported a second-quarter 2023 adjusted EPS of 38 cents, which beat the Zacks Consensus Estimate by 58.3%.
Revenues of $396.5 million outpaced the consensus estimate by 3.3%.Insulet has an estimated long-term earnings growth rate of 41.5% compared with the industry’s 14.4% growth. PODD’s earnings surpassed estimates in all the trailing four quarters, the average being 126.9%.
Cencora reported third-quarter fiscal 2023 adjusted earnings of $2.92, which beat the Zacks Consensus Estimate by 3.2%. Revenues of $66.9 billion surpassed the Zacks Consensus Estimate by 5.6%. It currently has a Zacks Rank #2.
Cencora has an earnings yield of 6.8% compared with the industry’s -1.1%. COR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.5%.
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