Balanced View of Luminex Corporation - Analyst Blog

On April 11, we have updated our research report on Luminex Corporation LMNX. Luminex disappointed investors by posting an 11.8% fall in adjusted net earnings to 15 cents  per share and a 1.0% fall in revenues to $55.2 million. Nevertheless, the company beat the Zacks Consensus Estimate on earnings front by 8 cents per share but missed the Zacks Consensus Estimate revenues by $0.8 million.

The decline in Luminex earnings can be attributable to lower revenues and higher costs during the quarter. Poor assay revenues led to lower revenues during the quarter.

For full year 2013, adjusted net earnings fell about 11.0% to $16.9 million or 40 cents from $19.0 million or 45 cents in the prior year. However, revenues in the year grew 5.4% to $213.4 million, which is in line with the company's own guidance. Despite higher revenues, earnings in the year declined due to a considerable (15.9%) rise in operating expenses during the year.

For 2014, Luminex expects revenues in the range of $225 to $240 million, reflecting an increase of 5 to 12% over 2013. The Zacks Consensus Estimate of $231 million lies within the guided range.

Luminex is optimistic about the life science research market and foresees continued favorable trends with respect to demand from its clinical customers. In the assay business line, the company expects growth in GPP, CF and PGx product lines apart from continuing positive momentum in its LDT strategy. Luminex believes that the presence of a direct molecular diagnostic sales force will provide significant momentum in 2014.

We appreciate Luminex's broad product portfolio. The company is renowned for its advanced xMAP and xTAG and MultiCode technology. Besides, the company possesses a healthy pipeline and develops several new assays

However, Luminex operates in the highly competitive life sciences industry. The industry is characterized by rapid and continuous technological innovation. Currently, it is facing significant competitive headwinds in the respiratory market.

Currently, Luminex retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical instruments industry include Delcath Systems, Inc. DCTH, Syneron Medical Ltd. ELOS, and Teleflex Inc. TFX. Delcath Systems and Syneron Medical carry a Zacks Rank #1 (Strong Buy) while Teleflex holds a Zacks Rank #2 (Buy).