A month has gone by since the last earnings report for ABAXIS, Inc. ABAX. Shares have added about 6.7% in that time frame.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
Abaxis reported second-quarter fiscal 2018 adjusted earnings per share of 29 cents, in line with the Zacks Consensus Estimate. However, the adjusted EPS figure declined 42% from the year-ago figure of 50 cents.
Total Revenues
In the fiscal second quarter, Abaxis recorded revenues of $58.9 million, reflecting an increase of 0.5% from a year ago. The top line however missed the Zacks Consensus Estimate of $61 million. According to the company, foreign currency exchange rate fluctuations had a negligible or 0.4% impact on Abaxis’ top line.
Segments in Detail
On a geographic basis, revenues from North America (accounting for 79.7% of total revenue) declined 0.2% to $46.9 million in the reported quarter. Revenues from the international markets (accounting for the rest) improved 3.5% to $11.9 million.
Abaxis operates through three main segments, namely, Veterinary, Medical and Other. In the reported quarter, Veterinary sales accounted for 82.5% of total sales, Medical contributed 15.8% while the remaining 1.8% was generated from Other.
Veterinary market revenues improved 0.5% year over year to $48.5 million, driven by a 3% uptick in veterinary consumable revenues to $39.3 million. Veterinary instrument revenues were down 10% year over year to $7.5 million.
Revenues from the medical market were down from $9.4 million in the same quarter last year to $9.3 million as strength in Piccolo instrument was offset by decline in medical rotors. Also, revenues at the North American medical division totaled $6.8 million, up 1.5% year over year. On a global basis, Abaxis sold 225 Piccolos in the quarter compared with 208 a year ago.
Abaxis exhibited strong consumable growth, up 2% year over year to $46.4 million in the quarter. Within the consumable product lines, total rotor revenues were $31.6 million, almost in line with $31.7 million in the year-ago quarter. On a global basis, Abaxis sold 2.55 million rotor units in the quarter under review, down from 2.57 million units in the year-ago quarter. Hematology reagents and rapid assays drove growth in consumable revenues in the reported quarter.
However, total instruments’ sales decreased 7% to $9.2 million due to lower veterinary instrument sales.
Operational Updates
Fiscal second-quarter’s gross profit dropped 0.3% to $32.2 million. Gross margin contracted 50 basis points (bps) to 54.6%.
Research and development expenses increased 23.8% year over year to $6.1 million and sales and marketing expenses rose 10.9% to $12.5 million. General and administrative expenses however declined 4.3% to $4.2 million. However, the resultant operating income was down 19.7% to $9.4 million in the quarter, while operating margin declined 410 bps to 16%.
Financial Update
Abaxis exited the fiscal second quarter with cash, cash equivalents and short-term investments of $148.8 million, compared with $137.7 million in first-quarter fiscal 2018.