Why Is Haemonetics (HAE) Down 1.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Haemonetics (HAE). Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Haemonetics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Haemonetics Q1 Earnings Top Estimates, 2024 View Up
Haemonetics delivered adjusted earnings per share of $1.05 in the first quarter of fiscal 2024, up 81% year over year. The bottom line surpassed the Zacks Consensus Estimate by 38.2%.
On a GAAP basis, the EPS was 80 cents compared with 38 cents in the prior-year quarter.
Total Revenues
Revenues increased 19.1% (up 20.5% on an organic basis) to $311.3 million in the first quarter of fiscal 2024. The top line beat the Zacks Consensus Estimate by 4.5%. The uptick was driven by growth across all segments.
Segments in Detail
At Plasma, revenues of $138.6 million (accounting for 44.5% of the total revenues) rose 35.4% year over year (up 35.5% on an organic basis) in the reported quarter.
Revenues at Blood Center (22.6%) rose 2.5% (up 5.8% on an organic basis) to $67.3 million.
Hospital revenues (31.9%) rose 12.6% (up 13.8% on an organic basis) to $99.6 million. It was primarily driven by growth in Vascular Closure and Hemostasis Management.
Service revenues (1.9%) increased 18.1% (up 19.3% on an organic basis) to $5.8 million.
Margins
In the first quarter of fiscal 2024, the company-adjusted gross margin was 54.2%, down 100 basis points (bps) year over year. The primary drivers of the decline in gross margin percentage were inventory reserves, investments in operations and increased depreciation expenses, partially offset by geographic and product mix, volume and price.
Company-adjusted operating expenses in the first quarter of fiscal 2024 were 31% compared with 38.1% from the year-ago quarter. The downside in adjusted operating expenses, as a percentage of revenues, was driven by operating leverage. Continuous growth investments partially offset this.
The company-adjusted operating income was $70.2 million in the quarter under discussion, up 56.5% year over year. The adjusted operating margin was 22.6%, up 540 bps from the year-ago quarter.
Financial Position
Haemonetics exited the fiscal first quarter with cash and cash equivalents of $285.7 million compared with $284.5 million at the end of the fourth quarter of fiscal 2023. The long-term debt at the end of the fiscal first quarter was $751.4 million, up from $754.1 million at the end of the fourth quarter of 2023.
The cumulative net cash flow from operating activities at the end of the first quarter of fiscal 2024 was $19.1 million compared to the $41.9 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 6 on a reported basis (earlier guided range was 4). Organic revenue growth is anticipated at 7 (earlier guided range was 5). The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $1.25 billion.
HAE expects the full-year adjusted EPS in the band of $3.60-$3.90 ($3.45-$3.75). The Zacks Consensus Estimate for the same is pegged at $3.58.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Haemonetics has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Haemonetics has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Haemonetics is part of the Zacks Medical - Products industry. Over the past month, Agios Pharmaceuticals (AGIO), a stock from the same industry, has gained 1.9%. The company reported its results for the quarter ended June 2023 more than a month ago.
Agios Pharmaceuticals reported revenues of $6.71 million in the last reported quarter, representing a year-over-year change of +20.3%. EPS of -$1.51 for the same period compares with -$1.68 a year ago.
Agios Pharmaceuticals is expected to post a loss of $1.69 per share for the current quarter, representing a year-over-year change of -13.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.7%.
Agios Pharmaceuticals has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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