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OPKO Health's (OPK) Q4 Earnings Miss Estimates, Revenues Top

OPKO Health, Inc. OPK delivered loss per share of 11 cents in the fourth quarter of 2021 against earnings per share (“EPS”) of 5 cents in the year-ago period. The figure was wider than the Zacks Consensus Estimate of a loss of 3 cents per share.

Full-year adjusted loss per share was 5 cents, against EPS of 5 cents at the end of 2020. The Zacks Consensus Estimate for full-year EPS was 4 cents.

Revenues in Detail

OPKO Health registered revenues of $401.3 million in the fourth quarter, down 18.9% year over year. The figure exceeded the Zacks Consensus Estimate by 19.9%.

Full-year revenues were $1.77 billion, reflecting a 23.6% improvement over 2020. The metric surpassed the Zacks Consensus Estimate by 3.5%.

Segmental Revenues

OPKO Health manages its operations through two reportable segments – Diagnostics and Pharmaceuticals.

Within the Diagnostics arm, revenues from services amounted to $362.8 million in the reported quarter, down 20.8% year over year, primarily due to a fall in COVID-19 testing volume.

BioReference Laboratories (“BRL”) processed approximately 2.7 million COVID-19 polymerase chain reaction (“PCR”) tests in the fourth quarter of 2021, up 22.7% sequentially.

Within the Pharmaceuticals arm, revenues from products rose 14.6% to $35.3 million owing to the accelerating growth within OPKO’s international pharmaceutical businesses. Revenues from sales of RAYALDEE in the fourth quarter of 2021 were $7.7 million, down 23.8% from the prior-year period, primarily due to challenges encountered in onboarding new patients due to the pandemic.

Total RAYALDEE prescriptions declined 24.2% year over year to approximately 11,450 in the fourth quarter.

Revenues from transfer of intellectual property and other totaled $3.2 million, down 45.8% year over year due to lower Somatrogon R&D-related revenue.

OPKO Health, Inc. Price, Consensus and EPS Surprise

OPKO Health, Inc. Price, Consensus and EPS Surprise
OPKO Health, Inc. Price, Consensus and EPS Surprise

OPKO Health, Inc. price-consensus-eps-surprise-chart | OPKO Health, Inc. Quote

Margin Analysis

In the quarter under review, OPKO Health’s gross profit fell 38.3% to $108.5 million. Gross margin contracted 853 basis points (bps) to 27%.

Selling, general & administrative expenses rose 35.8% to $138.2 million. Research and development expenses rose 20% year over year to $21 million. Adjusted operating expenses of $159.2 million increased 33.4% year over year.

Adjusted operating loss totaled $50.7 million against the prior-year quarter’s adjusted operating profit of $56.6 million.

Financial Position

OPKO Health exited the full year of 2021 with cash and cash equivalents of $134.7 million compared with $72.2 million at the end of 2020.

2022 Guidance

OPKO Health has initiated its financial outlook for full-year 2022.

The company expects overall revenues for 2022 to be between $1.1 billion-$1.2 billion. The Zacks Consensus Estimate for the same currently stands at $1.23 billion.

The full-year overall revenues include revenues from services of $940 million-$1 billion, revenues from products of $145 million-$155 million, and other revenues of $18 million-$22 million.

OPKO Health expects to perform between 2.2-2.6 million COVID-19 PCR, point of care and antibody tests during full-year 2022.

Our Take

OPKO Health exited the fourth quarter of 2021 with better-than-expected revenues. Uptick in year-over-year Pharmaceuticals revenues is encouraging. Increase in volume in the urology business is impressive. BRL’s robust COVID-19 testing volume in the reported quarter raises our optimism. Developments like NGENLA (somatrogon) injection being granted regulatory approvals in Europe, Japan, Australia and Canada for pediatric growth hormone deficiency and the FDA approving the premarket approval application of the 4Kscore Test auger well for the company.

Launch of RAYALDEE in Germany by OPKO Health’s licensee, Vifor Fresenius Medical Care Renal Pharma, and the announcement of favorable top-line results from a Phase 2 clinical trial evaluating RAYALDEE as a treatment for symptomatic COVID-19 outpatients during the quarter are other highlights.

However, year-over-year fall in the overall top and bottom lines, as well as in the Diagnostics arm’s revenues, are concerning. Lower revenues from transfer of intellectual property and other is also worrying. Fall in total RAYALDEE prescriptions and sales are some other concerns. Contraction of gross margin does not bode well for the company.

Zacks Rank and Key Picks

OPKO Health currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. AMN, Allscripts Healthcare Solutions, Inc. MDRX and Henry Schein, Inc. HSIC.

AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2021 adjusted EPS of $2.95, which beat the Zacks Consensus Estimate by 14.3%. Revenues of $1.36 billion outpaced the consensus mark by 0.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20%.

Allscripts, sporting a Zacks Rank #1, reported fourth-quarter 2021 adjusted EPS of 79 cents, which beat the Zacks Consensus Estimate by 154.8%. Revenues of $391.7 million outpaced the consensus mark by 0.1%.

Allscripts has an estimated long-term growth rate of 12.4%. MDRX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 64.8%.

Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #1.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%


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