Haemonetics (HAE) Q3 Earnings Top Estimates, 2024 View Raised
Haemonetics Corporation HAE delivered adjusted earnings per share (EPS) of $1.04 for the third quarter of fiscal 2024, up 22.4% year over year. The bottom line surpassed the Zacks Consensus Estimate by 7.2%.
On a GAAP basis, EPS was 61 cents, down 4.7% from the prior-year quarter.
Total Revenues
Revenues increased 10.1% (up 10% on an organic basis) to $336.3 million in the third quarter of fiscal 2024. The top line exceeded the Zacks Consensus Estimate by 4.1%. The uptick was driven by growth across Plasma and Hospital segments.
Segments in Detail
At Plasma, revenues of $146.8 million (accounting for 43.7% of the total revenues) rose 8.4% year over year (up 8.1% on an organic basis) in the reported quarter. The growth was primarily driven by increased volume in the quarter. This compares with our model projection of $136.6 million for the quarter reported.
Revenues at Blood Center revenues of $70.5 million (20.9% of total revenue) fell 3.9% (down 2.6% on an organic basis). According to Haemonetics, this year-over-year decline was primarily due to strong year-ago comparables.Our model projection for the same was $65.3 million for the fiscal third quarter.
Hospital revenues rose 23.9% (up 21.6% on an organic basis) to $113.4 million (33.7% of total revenue), primarily driven by growth in Vascular Closure and Hemostasis Management. This compares with our model projection of $114.3 million for the said quarter.
Haemonetics Corporation Price, Consensus and EPS Surprise
Haemonetics Corporation price-consensus-eps-surprise-chart | Haemonetics Corporation Quote
Service revenues of $5.5 million (1.6% of total revenue) rose 12.8% (up 10.9% on an organic basis). This compares favorably with our model projection of $5.2 million for the fiscal third quarter.
Margins
In the third quarter of fiscal 2024, the company-adjusted gross margin was 55.3%, up 280 basis points (bps) year over year. The primary drivers of the increase in the gross margin percentage were price, volume and a favorable mix driven by strong sales in Hospital and continued momentum in Plasma. This was partially offset by increased depreciation, impacts from foreign exchange, and certain charges related to a voluntary product recall in the Whole Blood business.
Company-adjusted operating expenses in the third quarter of fiscal 2024 were up 11% to $112.7 million. The increase in adjusted operating expenses was primarily due to higher growth investments, higher performance-based compensation and, to a lesser extent, higher freight cost.
The company-adjusted operating income was $73.4 million in the quarter under discussion, up 23.6% year over year. The adjusted operating margin was 21.8%, up 250 bps from the year-ago quarter’s levels.
Financial Position
Haemonetics exited the fiscal third quarter with cash and cash equivalents of $193.9 million compared with $351 million at the end of the second quarter of fiscal 2024. The long-term debt at the end of the fiscal third quarter was $856.8 million, up from $748.7 million at the end of the second quarter of 2024.
The cumulative net cash flow from operating activities at the end of the third quarter of fiscal 2024 was $117.7 million compared with $193 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 10-12% on a reported basis (earlier guidance was 8-10%). Organic revenue growth too is anticipated in the range of 10%-12% (earlier guidance was 8-10%). The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $1.27 billion.
HAE expects full-year adjusted EPS in the band of $3.90-$4.00 ($3.75-$3.95). The Zacks Consensus Estimate for the same is pegged at $3.89.
Our Take
Haemonetics ended the third quarter of fiscal 2024 with better-than-expected earnings and revenues. Strong momentum in U.S. collections and prices drove the robust volume growth and price benefits in the Plasma business. The rollout of Persona, the company’s proprietary technology continued to gain momentum with more than 25 million collections. Within the Hospital arm, the company reported continued momentum with new account openings and improving utilization throughout the United States. A raised fiscal guidance is encouraging.
However, whole blood revenues declined in the reported quarter, predominantly due to lower volumes associated with the company’s decision to rationalize parts of this business. Stiff competition remains a concern.
Zacks Rank & Other Key Picks
Haemonetics carries a Zacks Rank #2 (Buy) currently.
Some other top-ranked stocks in the broader medical space that have announced quarterly results are HCA Healthcare, Inc. HCA, Elevance Health, Inc. ELV and Stryker Corporation SYK.
HCA Healthcare reported fourth-quarter 2023 adjusted EPS of $5.90, beating the Zacks Consensus Estimate by 16.8%. Revenues of $17.30 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HCA Healthcare has a long-term estimated growth rate of 9.7%. HCA’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.8%.
Elevance Health, carrying a Zacks Rank of 2, reported fourth-quarter 2023 adjusted EPS of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%.
Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.
Stryker reported fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.82 billion surpassed the Zacks Consensus Estimate by 3.8%. It currently carries a Zacks Rank #2.
Stryker has a long-term estimated growth rate of 10.3%. SYK’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 5.1%.
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