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Ortho Clinical Diagnostics Q3 Revenues Rise 16 Percent

NEW YORK – Ortho Clinical Diagnostics said after the close of the market Wednesday that its third quarter revenues rose 16 percent year over year.

For the three months ended Oct. 3, the Raritan, New Jersey-based firm reported revenues of $522.5 million compared to $451.1 million in Q3 2020, beating analysts' average estimate of $481.7 million.

The firm's Q3 core revenues, which exclude contract manufacturing and other licensing revenues, rose 15 percent year over year to $508.9 million compared to $443.3 million a year ago. It reported non-core revenues of $13.6 million, up 74 percent year over year from $7.8 million.

Ortho delivered "profitable growth across all major geographic regions," Chris Smith, chairman and CEO of Ortho, said in a statement. "Both our Clinical Laboratories and Transfusion Medicine businesses grew double digits, supported by our strong recurring revenue base."

On a conference call to discuss the firm's financial results, Ortho Clinical Diagnostics CFO Joseph Busky said that in Q3 its Clinical Laboratory business grew 10 percent and Transfusion Medicine grew 21 percent compared to the prior-year quarter.

"The substantial revenue growth in the third quarter was primarily driven by the strong recurring revenue pull-through on the instruments we placed over the past couple of years across geographies in both [clinical] labs and transfusion medicine," he said, adding, "Our [clinical] labs business generated $12 million in COVID assay-related revenue, which was down from $21 million in Q3 of last year."

Further, Q3 COVID assay revenue was down $5 million sequentially.

Smith added that during the quarter, US commercial growth excluding COVID-19 assays rose 13 percent year over year, driven by strong instrument placements, especially for its integrated systems, as well as menu expansion and reoccurring revenues from testing.

In Europe, the Middle East, and Africa, growth excluding COVID assays increased 14 percent year over year, driven by strength in its Clinical Laboratory business. China grew double digits year over year for the third quarter in a row.

Though the firm's Q3 immunoassay business grew 20 percent year over, Ortho has "not seen a full recovery in routine clinical testing," Smith said.

He added that in Q3 the firm's overall installed base grew 6 percent year over year and placements of its integrated systems, which consist of both immunoassay and clinical chemistry tests, grew 13 percent compared to the prior-year quarter.

In Q3, the company posted a net income of $14.7 million, or $.06 per share, compared to a net loss of $28.5 million, or $.20 per share, in Q3 2020. Ortho's adjusted earnings per share was $.21, beating analysts' average estimate of $.14.

The company's Q3 R&D expenses were slightly down year over year to $32.1 million from $32.7 million, and its SG&A expenses rose 16 percent year over year to $140.9 million from $121.0 million.

Ortho revised its core revenue guidance for full-year 2021 and now expects revenues to be between $2.00 billion and $2.02 billion, up from a previously announced guidance of between $1.95 billion and $1.98 billion. It expects adjusted EPS will be between $.76 and $.78, up from a previous estimate of between $.67 and $.72.

Ortho ended Q3 with $255.9 million in cash and cash equivalents.

In Thursday morning trading on the Nasdaq, shares of Ortho were up more than 6 percent to $19.82.