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IDEXX (IDXX) to Report Q4 Earnings: What's in the Cards?

IDEXX Laboratories, Inc. IDXX is expected to report fourth-quarter 2022 results on Feb 1, before market open.

In the last reported quarter, the company’s earnings per share of $2.15 surpassed the Zacks Consensus Estimate by 5.4%. Moreover, earnings outpaced the consensus estimate in the trailing four quarters, the average beat being 5.19%.

Let’s take a look at how things have shaped up prior to this announcement.

Factors at Play

The Companion Animal Group (CAG) business is expected to have gained from consistently strong organic CAG Diagnostics recurring revenues backed by an increasing number of pet patients. Supported by solid global demand for veterinary services, building on a significant step-up in pet ownership and patient visits will lead to substantial CAG Diagnostic recurring revenue gains in Q4.

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Sales contributions from veterinary software and diagnostic imaging, including the benefits from the ezyVet acquisition, are likely to have been advantageous for the business in the to-be-reported quarter. The company’s veterinary software is also expected to report strong growth for the fourth quarter supported by gains in recurring software and digital imaging revenues and continued strong momentum in cloud-based software placements.

IDEXX Laboratories, Inc. Price and EPS Surprise

 

IDEXX Laboratories, Inc. Price and EPS Surprise
IDEXX Laboratories, Inc. Price and EPS Surprise

IDEXX Laboratories, Inc. price-eps-surprise | IDEXX Laboratories, Inc. Quote

 

IDEXX’s CAG premium instrument placements are expected to have recorded strong growth in Q4 on the continued rise in Catalyst and premium hematology placements. In the prior quarter, consumable gains were supported by 14% year-on-year growth in the global premium instrument installed base, reflecting double-digit increases across catalyst premium hematology and a set of new platforms. The company placed 4,737 CAG premium instrument placements in the third quarter. Strong customer retention backed by ProCyte One momentum and global expansion efforts in premium hematology placements is likely to have benefited the company’s CAG arm in Q4.

The Zacks Consensus Estimate for CAG revenues is pegged at $736 million, suggesting an improvement of 2.4% from the year-ago quarter’s reported figure.

IDEXX’s Water business is likely to have delivered impressive revenue performance on solid volume gains and strong price gains. The business is expected to have benefited from a continued increase in water testing demand across the world as the effects of the pandemic abate and economies gradually recover from the pandemic.

During the third quarter, IDEXX completed the acquisition of Tecta-PDS — an automated microbiology testing platform that complements our existing water offering and expands our capabilities in this highly-attractive business segment. We expect this buyout to have contributed to IDEXX’s revenues in the to-be-reported quarter.

The Zacks Consensus Estimate for Water revenues is pegged at $38.1 million, suggesting a rise of 2.6% from the year-ago quarter’s reported figure.

Within the Livestock, Poultry and Dairy (LPD) arm, we expect revenue growth in Q4 to have been impacted by lower pork prices and changes in government requirements related to livestock infectious disease testing programs.

The Zacks Consensus Estimate for LPD revenues is pegged at $30.4 million, suggesting a fall of 28.5% from the year-ago quarter’s reported figure.

Q4 Estimates

The Zacks Consensus Estimate for the company’s fourth-quarter 2022 revenues is pegged at $815.7 million, suggesting a rise of 1.8% from the year-ago reported figure.

The Zacks Consensus Estimate for fourth-quarter 2022 net earnings of $1.92 per share indicates a 1.6% improvement from the year-ago reported figure.

What Our Model Suggests

Our proven model predicts an earnings beat for IDEXX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company has an Earnings ESP of 0.39%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2.

Stocks Worth a Look

Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this quarter.

Cardinal Health CAH has an Earnings ESP of +5.75% and a Zacks Rank of #2. The company will release fourth-quarter 2022 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cardinal Health has a long-term expected earnings growth rate of 11.7%. Cardinal Health’s earnings yield of 6.87% compares favorably with the industry’s 4.34%.

McKesson Corporation MCK has an Earnings ESP of +0.84% and a Zacks Rank of #2. McKesson is scheduled to release third-quarter fiscal 2023 results on Feb 1.

MCK’s long-term historical earnings growth rate is estimated at 10.1%. MCK’s earnings yield of 6.49% compares favorably with the industry’s 4.34%.

Laboratory Corporation of America Holdings or LabCorp LH currently has an Earnings ESP of +2.67% and a Zacks Rank of #2. LabCorp is expected to release fourth-quarter 2022 results on Feb 9.

LabCorp’s long-term historical earnings growth rate is estimated at 26.1%. LabCorp’s earnings yield of 7.02% compares favorably with the industry’s 4.34%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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