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A month has gone by since the last earnings report for Accuray (ARAY). Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Accuray due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Accuray Reports Loss in Q4, Fiscal 2020 Guidance Slashed
Accuray reported fourth-quarter fiscal 2019 adjusted loss of 2 cents per share against the Zacks Consensus Estimate of earnings per share (EPS) of 3 cents. The company had reported a loss of a penny in the year-ago quarter.
Net revenues of the company totaled $117.4 million, surpassing the Zacks Consensus Estimate by 1.1%. On a year-over-year basis, revenues climbed 3.2%.
Fiscal Q4 Details
Product Revenues: Product revenues increased 11% year over year to $60.6 million in the reported quarter on strong demand for the Radixact system.
Service Revenues: Service revenues totaled $56.8 million, down 4% from the year-ago quarter.
Gross Order Update: Gross orders in the fiscal fourth quarter totaled $97.2 million, up 0.8% year over year. The upside was driven by strong demand for Radixact, CyberKnife and TomoTherapy platforms. Radixact accounted for approximately 60% of total gross orders while CyberKnife grew double digits.
U.S. gross orders declined in the reported quarter while that in EMEA grew mid-single digits.
Margins
Gross profit in the fiscal fourth quarter totaled $45.9 million, down 4.3% on a year-over-year basis. Gross margin was 39.1%, highlighting a contraction of 310 basis points (bps) year over year.
Research and development expenses rose 10% year over year to $16.1 million. Selling and marketing expenses declined 11.5% to $14.9 million. General and administrative expenses contracted 13% to $11.7 million.
Fourth-quarter operating profit was $3.3 million, up 5.3% from the year-ago quarter. Operating margin was 2.8%, up 10 bps year over year.
Cash Position
The company exited fourth-quarter fiscal 2019 with total cash, cash equivalents, and short-term restricted cash of $87 million, compared with $22.4 million at the end of Mar 31, 2019.
FY20 Guidance
For fiscal 2020, Accuray expects revenues within $410-$420 million. Per management, Accuray has slashed its guidance by 1.5%. The company expects revenues from EMEA and Japan to remain flat or slightly below the fiscal 2019 levels. In the United States, Accuray expects modest revenue growth in fiscal 2020.