Tuesday, QuidelOrtho Corp QDEL reported fourth-quarter 2023 adjusted EPS of $1.17, missing the consensus of $2.05.
Adjusted EBITDA margin for the fourth quarter of 2023 was 26%, compared to 28% a year ago.
The year-over-year change in adjusted diluted EPS and EBITDA was primarily related to the decline in COVID-19 revenue compared to the prior year period.
The company reported sales of $742.60 million, missing the consensus estimate of $796.91 million.
Non-respiratory revenue increased by 9%, driven by lab strength in clinical chemistry and immunoassay. Excluding respiratory, Labs grew 13% in constant currency.
Also Read: Diagnostics Firm QuidelOrtho Contemplates Selling Transfusion Medicine Arm Valued Up To $2B: Report.
Respiratory revenue decreased by 49% as reported and in constant currency due to lower COVID-19 and flu markets compared.
Guidance: QuidelOrtho expects fiscal year 2024 revenues of $2.76 billion-$3.07 billion versus the consensus of $2.948 billion, including non-respiratory revenue of $2.30 billion-$2.34 billion and respiratory revenue of $460 million – $730 million.
The company expects adjusted EPS of $2.40-$3.07 compared to the consensus of $5.07, with adjusted EBITDA guidance of $565 million- $720 million.
William Blair downgraded QuidelOrtho to Market Perform rating from Outperform.
The analyst writes that respiratory revenue issues were identified as contributing to headaches in the context of financial outlook. The total sales projection ranged from $2.76 billion to $3.07 billion. Respiratory revenue was expected to be between $460 million and $730 million, showing a wide range of $270 million.
Non-respiratory growth aligned with consensus, excluding factors related to the U.S. donor screening wind-down and third-party collaboration settlements.
Management acknowledged that previous assumptions about respiratory performance were overly optimistic.
The revised outlook aimed to address this, but challenges persisted, especially with over $200 million in standalone COVID-related expenses.
Lower expectations for respiratory sales affected profits, causing a significant 300-basis-point headwind to AEBITDA margin due to the impact on higher-margin products.
Price Action: QDEL shares are down 28.60% at $47.68 on the last check Wednesday.
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