Cepheid (CPHD: 16.54 +1.77 +11.98%) lowered its second quarter fiscal 2010 loss per share to 3 cents as compared with a loss of 12 cents in the second quarter of 2009. After making adjustments, the company’s earnings came in at 5 cents per share, much better than the Zacks Consensus Estimate of a loss of 10 cents and the year-ago loss of 4 cents per share.Revenues for the quarter increased 21.0% to $49.6 million, marginally beating the Zacks Consensus estimate of $49.0 million. Revenue increase was driven by a 23% growth in product sales ($48.6 million) attributable to continued adoption of its GeneXpert System in the clinical market.
Among the different markets, the Clinical segment consisting of Clinical Systems ($6.1 million) and Clinical Reagents ($31.6 million) contributed about 77.5% to total product sales during the reported quarter. Cepheid’s other markets — Industrial, Biothreat and Partner — recorded revenues of $4.7 million (up 8% year-over-year), $5.0 million (down 35%) and $1.2 million (up 47%), respectively. Domestic and international sales recorded a year-over-year increase of 22% and 27%, respectively.
Gross margin on product sales improved to 50% compared with 44% in the second quarter of 2009. Operating expenses amounted to $25.3 million as compared with $22.5 million in the second quarter 2009, including a 2% year over year decrease in Research & Development expenses ($10.1 million). However, Sales & Marketing expenses ($9.3 million) as well as General & Administrative expenses ($5.8 million) increased by 35% and 9% year over year, respectively.
During the quarter, Cepheid’s 106 GeneXpert systems and 478 modules were installed. At the end of June 2010, a cumulative total of 1,605 GeneXpert systems and 8,618 modules had been placed worldwide. At the end of the reported quarter, cash and cash equivalents were $36.53 million, up from $35.78 million at the end of December 2009.
Cepheid reiterated its outlook for 2010. The company expects revenues and adjusted net loss per share in the range of $200 million–$205 million and 5 cents–9 cents, respectively.
We are pleased with Cepheid’s ability to reduce its loss per share. The company is looking to expand its test menu, which should enable it to record increased revenues in the forthcoming quarters.
Overall Summary: |  20%, Bullish 80%, Bearish |
Analysts' Targets | |
Robert W. Baird & Co. | $24 |
Outperform | |
Friday, April 23, 2010 | |
Thomas Weisel | $20 |
Overweight | |
Thursday, April 15, 2010 | |
Dahlman Rose & Co. | $22 |
Outperform | |
Wednesday, April 07, 2010 | |
Ladenburg, Thalmann | $22 |
Mkt Outperform | |
Tuesday, March 23, 2010 | |
Jefferies & Co. | $20 |
Buy | |
Thursday, January 21, 2010 | |
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