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It has been about a month since the last earnings report for Haemonetics (HAE). Shares have added about 4.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Haemonetics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Haemonetics Q1 Earnings Top Estimates, Margins Improve
Haemonetics delivered adjusted earnings per share of 50 cents in the first quarter of fiscal 2022, reflecting 8.7% year-over-year growth. The bottom line surpassed the Zacks Consensus Estimate by 6.4%.
On a GAAP basis, net loss was 9 cents per share against the year-ago earnings per share of 21 cents.
Revenues increased 16.8% (up 6% on an organic basis) to $228.5 million in the first quarter of fiscal 2022. The top line also surpassed the Zacks Consensus Estimate by 1.3%.
The year-over-year increase in revenues was supported by recovery across all businesses, especially Hospital, and the initial Plasma Persona rollouts.
Revenues by Product Categories
At Plasma, revenues of $71.8 million (accounting for 31.4% of total revenues) increased 5.3% year over year (up 6.2% on an organic basis) in the reported quarter.
Revenues at Blood Center (31.9%) fell 6.2% (down 5.9% on an organic basis) to $72.9 million.
Hospital revenues (34.3%) rose 75.1% (up 26.4% on an organic basis) to $78.5 million. Under the Hospital segment, organic revenue growth in the Hemostasis Management product line was 34.3% in the first quarter of fiscal 2022 on strong capital sales in North America and EMEA.
Service revenues (2.3%) rose 10.7% (up 3.7% on an organic basis) to $5.2 million.
The company-adjusted gross margin was 54.7%, up 750 basis points (bps) year over year. The primary drivers of this improvement were the addition of Vascular Closure from the acquisition of Cardiva Medical, Inc. (Cardiva), productivity savings from the Operational Excellence Program, favorable product mix and improved operating efficiency, partially offset by the impact of previous divestitures and price adjustments.
Adjusted operating expenses in the first quarter of fiscal 2022 were $87.1 million, up 36.7% from the year-ago quarter. The increase was primarily driven by a rise in variable compensation and the acquisition of Cardiva Medical, an increase in variable compensation and continued investments.
The company-adjusted operating income was $37.9 million in the quarter under discussion, up 32.9% year over year. Adjusted operating margin was 16.6%, up 200 bps compared to the year-ago quarter.
Haemonetics exited the first quarter of fiscal 2022 with cash and cash equivalents of $173.5 million compared with $192.3 million at the end of fourth-quarter 2020. Long-term debt at the end of the first quarter of fiscal 2022 was $767.3 million, up from $690.6 million at the end of fourth-quarter 2021.
Cumulative net cash flow used in operating activities at the end of first-quarter fiscal 2022 was $1.7 million compared with $11.8 million net cash flow provided from operating activities a year ago.
Cumulative capital expenses (net of proceeds from sale of property, plant and equipment) incurred by the company were $13.9 million, up from the year-ago $7.7 million. It also reported free cash flow (before restructuring and turnaround costs) of $1.8 million during the same period, down 83.1% from $10.9 million a year ago.
Haemonetics has reinstated its full-year 2022 financial guidance. The company expects GAAP total revenue growth in the range of 13-18% on a reported basis (organic growth projection in the range of 8-12%). The Zacks Consensus Estimate for 2022 revenues is pegged at $1 billion.
The company expects full-year adjusted earnings per share in the band of $2.60-$3.00. The Zacks Consensus Estimate for the same is pegged at $2.78.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
At this time, Haemonetics has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Haemonetics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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