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Exact Sciences (EXAS) Q1 Earnings Top, Sales View Raised

Exact Sciences Corporation EXAS reported a net loss of 42 cents per share for first-quarter 2023, narrower than a net loss of $1.04 per share in the year-ago quarter and the Zacks Consensus Estimate of a loss of 79 cents.

Revenues in Detail

First-quarter consolidated revenues were $602.5 million, up 24% year over year. The metric exceeded the Zacks Consensus Estimate by 11.8%.

Segments in Detail

Screening revenues, including laboratory service revenues from Cologuard, PreventionGenetics and immaterial revenues from Biomatrica products, were $443.2 million. The figure increased 45% year over year.

The screening revenue upside can be primarily attributed to broad-based momentum in Cologuard adoption with additional benefits from a relatively mild flu season and enhancements made last year to the company’s patient compliance program and billing systems.

Exact Sciences Corporation Price, Consensus and EPS Surprise

Exact Sciences Corporation Price, Consensus and EPS Surprise
Exact Sciences Corporation Price, Consensus and EPS Surprise

Exact Sciences Corporation price-consensus-eps-surprise-chart | Exact Sciences Corporation Quote

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Precision Oncology revenues, including laboratory service revenues from global Oncotype products and therapy selection products, were $155 million, up 2% year over year. Growth was 8%, excluding the sale of the company’s prostate business and a $1 million foreign exchange headwind.

Revenues from COVID-19 testing totaled $4 million, down 86% year over year.

Margin

In the quarter under review, Exact Sciences’ gross profit (excluding the amortization of acquired intangibles) rose 26.6% to $445.6 million. The gross margin expanded 165 basis points (bps) to 73.9%.

Research and development expenses declined 6.7% year over year to $95.4 million. Sales and marketing expenses fell 19.5% to $186.9 million. General and administrative expenses rose 27.9% year over year to $217.3 million.

Adjusted operating expenses were $499.7 million in the first quarter, down 0.9% year over year. Adjusted operating loss totaled $54.1 million, narrower than the year-ago operating loss of $152.3 million.

Financial Update

Exact Sciences exited the first quarter of 2023 with cash and cash equivalents and marketable securities of $698.6 million compared with $632.1 million at the end of 2022.

The company reported long-term debt of $50 million on its balance sheet at the end of Q1, unchanged from 2022 level.

2023 View

The company raised its 2023 revenue guidance to the range of $2.380-$2.420 billion (from the earlier guidance of $2.265-$2.315 billion). The Zacks Consensus Estimate for the same is pegged at $2.26 billion.

For 2023, the company now expects its Screening revenues in the range of $1.770-$1.795 billion ($1.660-$1.690 billion). The company expects Precision Oncology revenues in the range of $605-$620 million ($600-$620 million). COVID-19 testing revenues are expected to be $5 million (unchanged).

Our Take

Exact Sciences exited the first quarter of 2023 with better-than-expected results. The quarterly loss narrowed significantly from the year-ago period. Robust revenues from the Screening and Precision Oncology segments contributed to the first-quarter top line. During the quarter, 10,000 new healthcare professionals ordered Cologuard, bringing the total to over 312,000.The growing uptake of the company’s Oncotype DX Breast and therapy selection products are major advantages. The raised 2023 guidance is a major upside.

However, the decline in COVID-19 sales hampered top-line growth. The company incurred an operating loss in the quarter under review, raising apprehension.

Zacks Rank and Key Picks

Exact Sciences currently carries Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation EW, Intuitive Surgical, Inc. ISRG and Johnson & Johnson JNJ.

Edwards Lifesciences, carrying a Zacks Rank #2 (Buy), reported first-quarter 2023 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and broke even in the other, the average being 1.2%.

Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.

Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.

Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.

Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.

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Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report

Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report

Exact Sciences Corporation (EXAS) : Free Stock Analysis Report

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