Cepheid Q3 Earnings Preview

(RTTNews) - Molecular diagnostics company Cepheid Inc. (CPHD) is set to announce financial results for the third quarter after the market closes on Wednesday, October 14. Analysts polled by Thomson Reuters expect the company to report a loss of $0.26 per share and revenue of $127.82 million.

For the third quarter...

The company expects total revenue in the range of $125 million - $128 million. The company noted that in terms of the more typical distribution of revenue throughout the year, this is a slightly lighter third-quarter than it has seen in the past at about 23% of full year revenue compared to 25% for the last two years.

Third-quarter commercial clinical revenue is expected to range between $99 million and $101 million, HBDC revenue between $20 million and $21 million and non-clinical revenue of about $6 million.

On a per share basis, GAAP loss is projected to be in the range of $0.28 - $0.30, and non-GAAP loss of $0.06 - $0.08.

For the fourth quarter...

Total fourth-quarter revenue is expected to be between $154 million and $160 million. Included in the total revenue, the company expects fourth-quarter commercial clinical revenue in the range of $123 million - $127 million, growth of 17% from the fourth quarter of 2014. This is about 25% sequential growth in commercial clinical business from the third quarter of 2015 consistent with the strengths of what it typically see in the fourth quarter.

Nineteen Wall Street analysts have a consensus revenue estimate of $156.36 million for the fourth quarter.

Cepheid expects a strong sequential growth from Q3 to Q4 in the commercial clinical revenue to be driven by a strong finish to the year for its commercial clinical systems, a higher level of productivity in its newly expanded North American sales organization, a seasonal contribution associated with its flu products, and a growing contribution from the 12 new products added to the Xpert test menu since the beginning of 2014.

FY15 Guidance

For the fiscal year 2015, Cepheid now expects net loss of $0.51 - $0.47 per share compared with prior guidance of a loss of $0.47 - $0.43 per share. It continues to expect adjusted earnings of $0.25 - $0.29 per share.

The company lifted the lower end of its 2015 revenue guidance by $2 million, now projecting a range of $544 million - $553 million, growth of 16% - 18% from 2014. It also expects commercial clinical revenue to range between $432 million and $438 million, growth of 21% - 23% over 2014.

Cepheid now sees HBDC revenue to be about $85 million - $88 million in 2015, and non-clinical revenue of about $27 million in 2015.

Analysts revised their consensus estimate to a loss of $0.50 per share on revenue of $549.40 million for 2015, from the previous estimation of loss $0.44 per share on revenues of $551.3 million.

Q2 Performance

Second quarter highlights included...

- Total revenue growth of 14% to $132.5 million;

- Total commercial clinical revenue of $100.8 million, up 24% or almost $20 million from the same quarter last year; and

- Another very strong quarter of menu execution with the CE-IVD releases of HIV qualitative and HCV Viral Load, the World Health Organization's inclusion of the company's Ebola test on its procurement list and the submission of its CLIA-waived Xpert Flu/RSV test to the FDA.

Cepheid incurred a loss of $16.7 million or $0.23 per share for the second quarter compared to a loss of $9.8 million or $0.14 per share last year.

Analysts polled by Thomson Reuters estimated a loss of $0.21 per share for the quarter.

Excluding stock-based compensation expense and other one-time items, adjusted loss for the quarter was $0.06 per share compared with earnings of $0.03 per share a year ago.

Revenues for the quarter were $132.5 million compared with $116.5 million in the prior year. Analysts estimated revenues of $130.7 million.

Operating expenses for the quarter increased to $143.2 million from $122.1 million last year.

Further, foreign currency losses totaled $1.5 million for the quarter.

Recent Happenings

In mid-August, Cepheid announced the departure of its Executive Vice President and Chief Financial Officer Ilan Daskal, adding his exit is not related to financial disclosure, accounting or legal matters.

Cepheid has named Dan Madden as a replacement for Daskal. Building on his previous experience as the company's corporate controller and acting CFO, Madden will now assume responsibility for worldwide finance operations, information technology and investor relations, the company said.

July 29, the company announced the international availability of an update to Xpert Carba-R, with the addition of two newly emerging carbapenemase genes, OXA-181 and OXA-232. The on-demand, molecular test also detects and differentiates among the five most prevalent mechanisms of carbapenem resistance, namely KPC, NDM, VIM, IMP-1 and OXA-48.