FY 2022 Q2 Earnings Trend Down, but Much Less than Predicted
While not nearly as robust as a year ago, diagnostic companies’ revenues held up surprisingly well in Q2 2022.

- Supply shortages
- Inflation
- Rising labor costs
- Shrinking demand for COVID-19 testing
- Lockdowns in China
With challenges such as these, the second quarter of 2022 was bound to be a rough one for diagnostics companies’ earnings. And, so it was—but only a little. While not nearly as robust as a year ago, revenues held up surprisingly well in Q2 2022. Here’s an overview of the quarter and its key trends.
Revenue Declines Not as Big as Expected
To put the earnings picture into perspective, it’s essential to keep in mind that reported revenues reflect a year-over-year (YOY) comparison to Q2 2021 when COVID-19 products fueled spectacular and, ultimately, unsustainable growth. Against this baseline, it’s hardly surprising that 14 of 34 companies reported flat or negative growth for the period, including testing mega-firms:
- Quest: down 4%
- Labcorp: down 3.7%
- Hologic: down 14%
- Siemens Healthineers: down 6%
- Becton Dickinson (BD): up less than 1%
- PerkinElmer: up less than 1%.
But the declines were less than feared. Thus, of the decliners and flat liners, all but six met their Wall Street targets on the top line, including BD, Cue Health, Fulgent Genetics, Hologic, PerkinElmer, Qiagen, and Quest.
While relatively high as compared to previous quarters, only slightly over 25 percent of reporting companies came in short of their Wall Street revenue estimates. Most of the misses were reported by smaller companies, with only two—Illumina and Labcorp—having revenues in the billions.
2022 Q2 Companies that Missed Their Wall Street Revenue Targets
COVID-19 Testing Continues to Tell the Story
Continuing the patterns of the past two years, the narrative for Q2 2022 was COVID-19. Most companies reported significant declines in COVID-19 testing revenues, both YOY and sequentially. However, declines weren’t as substantial as predicted. A few companies offering rapid, point-of-care tests even saw their COVID earnings increase, including Abbott, where sales of the at-home BinaxNOW SARS-CoV-2 antigen tests drove 33 percent growth in overall diagnostics revenues, and Gingko Bioworks’ subsidiary Concentric, where K-12 school COVID-19 YOY testing revenues ballooned from $21.6 million to $96.5 million.
Even more positively, rebounds in core revenues continue to offset COVID-19 declines.
2022 Q2 YOY Earnings: Core Lab vs COVID-19
It was much the same story at Hologic where the $172.9 million in COVID-19 revenue was down significantly YOY but not as low as expected and was enough to help the company generate total earnings of $1 billion, thanks to 15 percent core growth.
The Outlook
Even though COVID-19 products are still making money at a higher-than-expected rate, just about everybody, including Abbott, Labcorp, and Quest, is bracing for a massive decline in demand by year’s end.
At the same time, core products have and will continue to rebound beyond pre-pandemic levels. During Q2, 12 different companies raised their guidance for full year 2022, including Abbott, Agilent Technologies, BD, PerkinElmer, Qiagen, and Quest. Labcorp and Illumina were the only industry heavy hitters to go the other way and reduce their earnings guidance.
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Diagnostics Earning Reports for 2022 Q2 (period ended June 30, 2022)
(Companies with at least $20 million in sales)
Bold face: Companies that met or exceeded average or consensus Q2 Wall Street revenue estimates
* Companies that raised their revenue or earnings per share (EPS) guidance during Q2
** Companies that lowered their revenue or EPS guidance during Q2
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