Qiagen NV (QGEN) reported an adjusted EPS to 22 cents in the second quarter of 2010, surpassing the Zacks Consensus Estimate by a penny. EPS increased 8.3% year-over-year from 24 cents.
Results in the second quarter were adjusted for business integration, acquisition related and restructuring costs, a one-time tax benefit as well as amortization expenses.
Qiagen reported a 9% year-over-year increase in revenue to $262.7 million from $240.2 million in the year-ago quarter, which misses the Zacks Consensus Estimate of $274 million. Net revenue grew 11% year-over-year on a constant currency basis to $265.9 million.
Qiagen derives its revenue from three segments: Consumables, Instruments, and Other Products. Sales of both the Consumable segment (representing 85% of the net revenues) and Instrument segment (representing 14% of the net revenues) grew 10% year-over-year on a constant currency basis.
Within the Consumables, the major revenue contribution came from the molecular diagnostics (47% of total revenues) followed by sales to customers, in academia (24% of total revenues), in the pharmaceutical industry (22% of total revenues) and in applied testing markets (7% of total revenues). Qiagen intends to further explore the growth opportunities in these target markets.
Further, with regard to the applied testing markets, Qiagen recently added 70 new food safety tests to its assay technologies portfolio, which is expected to boost the company’s revenue going ahead. Moreover, Qiagen’s sample and assay technologies portfolio as well as its broad portfolio of instrument platforms augurs well for the company and provides it a strong platform to address the needs associated with molecular based drug development. Qiagen recently launched its new SABiosciences portfolio, enabling pharmaceutical and academic partners to go ahead with biomarker’s discovery and research.
Gross margins contracted 60 bps to 65.8% in the second quarter due to an increase of 11.4% in cost of sales. Operating expenses increased 14% to $124.1 million driven by a 18% year-over-year rise in research and development expenses to $29.4 million. Moreover, sales & marketing ($66.2 million) and general & administrative, integration and other expenses ($28.4 million) increased 12.4% and 15.4%, respectively.
Qiagen exited the first-half of 2010 with $844.2 million in cash and cash equivalents as compared with $825.6 million at the end of December 2009. Long-term debt was $871.8 million as compared with $870.0 million at the end of December 2009.
For the fiscal year 2010, Qiagen continues to expect net revenue of $1,120 million – $1,170 million and adjusted EPS of 90 cents – 96 cents. EPS guidance excludes 1 cent related to the acquisition of all rights to a portfolio of molecular food safety tests developed by the Institute for Product Quality (ifp) in May 2010.
Qiagen is one of the world’s leading providers of technologies and products for the separation, purification, and handling of nucleic acids. It has different platform technologies that address all needs in terms of throughput, flexibility in assay technologies, convenience in handling and efficiency in performance, an industry leading assays portfolio and a pipeline that offers an ongoing stream of new assays.
Qiagen’s acquisition strategy remains focused, consistent and value-creating, providing complementary technologies, new commercial capabilities and geographic reach. The company has gained market and technology leadership through various acquisitions in the last few years.