Solid 1Q for Abaxis Despite EPS Miss - Analyst Blog
27 7월 2012 - 7:45PM
Zacks
Abaxis Inc. (ABAX)
reported a 30% year-over-year increase in EPS to 13 cents in the
first quarter of fiscal 2013, but missed the Zacks Consensus
Estimate of 17 cents.
Revenues during the quarter
increased 17% year over year to $42.0 million, and surpassed the
Zacks Consensus Estimate of $40 million. The growth was based on
higher sales in both North America (up 12% to $33.2 million) and in
the international market (up 41% to $8.8 million).
Within the customer group,
Veterinary market revenues witnessed an upside of 17% in the
reported quarter to $32.5 million while Medical Market sales
delivered 18% year-over-year growth to $8.4 million. However, sales
from the Other customer group declined 6.4% year over year to $1.1
million. Excluding sales to the US government, worldwide Medical
sales escalated 27% year over year to $7.8 million.
Total consumable sales climbed 10%
year over year or $2.8 million while instrumental sales increased
by $2.4 million or 31% year over year.Moreover, sales from medical
and veterinary reagent discs increased 14% to $23.6 million. Total
medical and veterinary reagent disc unit sales during the quarter
were up 9% year over year to 1.7 million. Moreover, service revenue
from Abaxis Veterinary Reference Laboratories (AVRL) continued with
its growth momentum and recorded sales of $861,000, up 83%
sequentially.
Gross profit in the quarter
increased 18.8% year over year to $22.8 million, leading to a 100
basis points (bps) increase in gross margin to 54.4%. The company
also witnessed a 14.2% dip in research and development expenses (to
$2.9 million), 2.8% decline in general and administrative expenses
($3.3 million), offset by a 28.5% rise in sales and marketing
expenses ($11.8 million). Operating income during the quarter
increased a robust 49.9% to $4.8 million, leading to a 250 bps
expansion in the operating margin to 11.4%. The company also
recorded $230 million in interest expenses during the quarter
compared with gain of $294 million in the year-ago quarter.
Abaxis exited the first quarter
with cash and cash equivalents and short-term investments of $78.1
million, up from $67.5 million at fiscal 2012 end.
Abaxis operates in a niche market
of portable medical and veterinary blood analysis systems. Low
worldwide penetration provides scope for substantial growth in this
niche industry. Alongside, we are further impressed with the
newly-formed Abaxis Veterinary Reference Laboratories’ encouraging
performance in its third full quarter and is complimenting well
with the growth of the company’s veterinary segment.
Moreover, we note that the company
is taking initiatives to expand in the international medical
market. The recent contract with a leading international
biotechnology company to deliver 300 Piccolo Xpress instruments is
a big step in this regard. However, the competitive landscape is
tough with the presence of big players like Alere
(ALR) in the human and veterinary diagnostic market.
Currently, Abaxis carries a Zacks
#1 Rank (short-term ‘Strong Buy’ rating). Over the long term, we
maintain our ‘Outperform’ recommendation on the stock.
ABAXIS INC (ABAX): Free Stock Analysis Report
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Abaxis, Inc. (delisted) (NASDAQ:ABAX)
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Abaxis, Inc. (delisted) (NASDAQ:ABAX)
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