Diagnostics Earnings Report: Abbott, Quest, Genomics Labs Pace Fourth Quarter Growth

Fourth quarter earnings reports are starting to trickle in. Here is a big picture roundup of some of the key results so far.

Gainers
Companies with strong 4Q diagnostics revenues include:

• Abbott Laboratories: Year-over-year (YOY) growth of 3 percent driven by 4 percent increase in infectious disease testing and Core Laboratory sales (from $969 million to $1 billion)—offsetting 1 percent foreign exchange loss and 8 percent decline in molecular diagnostics due to wind-down of genetics business;

• Quest Diagnostics: Quarterly revenues of $1.86 billion on 0.7 percent growth (on a reported basis) and full year revenues of $7.52 billion on 0.3 percent growth;

• Luminex: Expected YOY growth of 20 percent for 4Q and 14 percent for year with revenues of, respectively, $72 million and $271 million, easily beating Wall Street estimates of $70.3 million and $268.9 million; and

• Invitae Corporation: Among best performing of genetic information companies with expected 33 percent revenue growth (as compared to Q3) driven by 200 percent YOY increase in billable test volume with approximately 59,000 tests for the year.

The genomic testing sector was strong with robust quarterly YOY growth reported by:

• T2 Biosystems (+50 percent) (preliminary);

• NanoString Technologies (+15 percent) (preliminary); and

• GenMark Diagnostics (+13 percent).

Decliners
Although gainers generally outnumbered decliners, companies with weaker than expected diagnostics revenues included:

• Meridian Bioscience: Decline of 1 percent for 3 months ended Dec. 31, 2016 (which is actually the company's first quarter) to $46.8 million, well below Wall Street estimate of $51.2 million, due to 4 percent decline in core diagnostics business which more than offset 3 percent growth in molecular diagnostics;

• Quidel: Expected 4Q revenue of $52 to $53 million, as opposed to Wall Street estimate of $63.1 million, which the company attributes to weak sales of influenza kits caused by late start to flu season; and

• Fluidigm: YOY decline of 19 percent (roughly $25 million v. $30.7 million in 4Q 2015) and expected 9 percent decline in full year revenues.

Takeaway: 2017 has started with more positive than negative earnings reports.