Myriad Genetics (MYGN) reported an EPS of 30 cents for the fourth quarter of fiscal 2011, beating the Zacks Consensus Estimate of 28 cents, but lower than the year-ago quarter’s adjusted EPS of 39 cents (after taking into account a one-time income tax benefit of $11.5 million).
For fiscal 2011, the EPS came in at $1.10, surpassing the Zacks Consensus Estimate by a penny, although lower than the previous year’s adjusted EPS of $1.41.
Revenues were $107.4 million, up 14% compared with the year-ago quarter and higher than the Zacks Consensus Estimate of $104.0 million. For fiscal 2011, revenues increased 11% to $402.1 million, beating the Zacks Consensus Estimate of $399 million.
Myriad recorded revenues from two businesses – Molecular diagnostic testing and Companion diagnostic services of $105.4 million (up 12.2% year over year) and $2 million, respectively. The company acquired the Companion diagnostic business following the acquisition of Rules-Based Medicine in May 2011. Molecular diagnostic testing revenue is derived from both Oncology (up 11% to $74.7 million) and Women’s Health (up 15% to $30.6 million).
While Myriad markets several molecular diagnostic products, the company's flagship product is Bracanalysis (representing 86% of total revenues during the quarter), which studies BRCA1 and BRCA2 genes for assessing woman's risk of developing hereditary breast and ovarian cancers. This test recorded a 12.5% growth in revenues to $92.8 million. Moreover, revenues derived from Colaris and Colaris AP, which assess a patient's risk of developing hereditary colorectal and uterine cancers, increased 2.7% to $7.6 million.
Gross profit (representing 88.3% of revenue) increased 14.8% year over year to $94.9 million. Operating expenses increased by 17.9% during the quarter to $53.1 million, due to a 10.2% rise in selling, general and administrative expenses ($43.9 million) while research and development (R&D) expenses increased 75.7% ($9.2 million). Due to the rise in operating expenses, operating margin declined 110 basis points to reach 38.9%.
Myriad exited the fiscal with cash, cash equivalents and marketable securities of $417.3 million, down from $488.4 million at the end of fiscal 2010. The company repurchased 9.8 million shares during the fiscal for $200.5 million. The consistent share buyback program had a favorable impact on the company’s bottom line.
Guidance
Myriad provided its guidance for fiscal 2012. The company expects to report revenues of $445-$465 million resulting in an EPS of $1.20-$1.25. While the current Zacks Consensus Estimate of $451 million in revenues is within the company’s guidance, the Zacks Consensus Estimate of $1.25 in earnings lies at the highest point of the company’s range. Molecular diagnostic testing and Companion diagnostic services are expected to record revenues of $421-$439 million and $24-$26 million, respectively.
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