Myriad Genetics (MYGN) Second Quarter Profit Up, Gross Margin Down

Myriad Genetics, Inc. MYGN reported adjusted earnings per share (EPS) of 4 cents in the second quarter of 2022, surpassing the Zacks Consensus estimate of an adjusted EPS of 2 cents. However, the statistic fell 66.7% from last year’s quarterly figure of 12 cents.

The quarterly adjustments exclude certain acquisition amortizations of, among other things, intangible asset costs and stock compensation.

GAAP loss per share was 18 cents, compared to the loss of 6 cents in the same quarter last year.

income

Total revenue declined 5.3% year over year to $179.3 million in the quarter under review. However, the figure surpassed the Zacks Consensus Estimate by 6.7%.

Excluding revenue from sales, RBM, Autoimmune and myPath, revenues increased 7% year-over-year in the second quarter.

Total test volumes in the quarter were 260,000, reflecting a 9% year-over-year increase (excluding divested businesses). The volume increased successively by 7%.

Quarter in detail

On a segment basis, Molecular Diagnostic tests posted total revenues of $179.3 million, up 0.3% year over year.

Within the segment, hereditary cancer testing revenues were down 8% year over year to $79.4 million. Pharmacogenomics testing revenues were $33.1 million, up 46% year over year.

Myriad Genetics, Inc. Price, Consensus and EPS Surprise

Myriad Genetics, Inc.  Price, Consensus and EPS Surprise

Myriad Genetics, Inc. price consensus-eps-surprise-chart | Myriad Genetics, Inc. Quote

Tumor profiling test revenues were up 11% year over year to $33.5 million. Revenue from prenatal testing came in at $33.3 million, an increase of 13%.

margin trends

Gross margin in the quarter under review contracted by 238 basis points (bps) to 72.3%.

Research and development expenses increased 4.1% year over year to $20.3 million. Selling, general and administrative expenses decreased 5.9% in the reported quarter to $127.1 million.

Adjusted operating loss was $17.8 million, compared to an adjusted operating loss of $13.3 million in the prior year quarter.

Financial position

Myriad Genetics exited the second quarter of 2022 with cash and cash equivalents of $105.2 million compared to $165.2 million at the end of the first quarter of 2022. However, the company had no debt on its balance sheet at the end of the second. quarter of 2022 .

Cumulative net cash used by operating activities at the end of the second quarter of 2022 was $96.8 million, compared to cumulative net cash from operating activities of $67.4 million a year ago.

Guidance

The company has updated its 2022 guidelines.

For 2022, the company has reconfirmed revenue expectations of $670-$700 million. The Zacks Consensus Estimate for the same is pegged at $685.3 million.

Adjusted EPS is now expected to be in the range of a loss of 10 cents to the breakeven level (previous guidance was in the range of 0-20 cents). The Zacks Consensus Estimate for the metric is pegged at 11 cents.

Our Take

Myriad Genetics exited the second quarter of 2022 with better-than-expected results. The robust performance of the Women’s Health business bodes well for the company. The improvement in sales of pharmacogenomics, tumor profiling and prenatal testing is impressive. Within the mental health field, the company posted strong volumes for its GeneSight Psychotropic test, sparking optimism. Gross margin growth also looks encouraging. The company’s strategic partnerships with Intermountain Precision Genomics and Epic Systems Corporation in the reported quarter are positives.

However, the year-on-year decline in sales is worrying. The company suffered an operating loss in the quarter. The lowered adjusted EPS forecast for 2022 also raises concerns.

Zack’s Rank and Key Picks

Myriad Genetics currently holds a Zacks Rank #3 (Hold).

Some of the better-ranked stocks in the broader medical space that have announced quarterly results include: Quest Diagnostics Incorporated DGX, Molina Healthcare, Inc. MOH and Merck & Co. MRK.

Quest Diagnostics, with a Zacks Rank #2 (Buy), reported adjusted EPS of $2.36 for the second quarter of 2022, which was 9.8% ahead of the Zacks Consensus Estimate. Revenue of $2.45 billion exceeded the consensus figure by 7.5%. You can see the full list of current Zacks #1 Rank (Strong Buy) stocks here.

Quest Diagnostics has an earnings return of 7.0% compared to 3.2% in the industry. DGX’s revenues exceeded estimates in three of the lagging four quarters and missed the same in one, averaging 12.1%.

Molina Healthcare, with Zacks Rank #2, reported an adjusted EPS of $4.55 for the second quarter of 2022, beating the Zacks Consensus Estimate by 4.8%. Revenue of $8.1 billion exceeded the consensus figure by 6.2%.

Molina Healthcare has an estimated long-term growth rate of 16.4%. MOH’s revenues exceeded estimates in the last four quarters, averaging 3.2%.

Merck reported adjusted earnings of $1.87 per share for the second quarter of 2022, beating the Zacks Consensus estimate of $1.67. Revenues of $14.6 billion surpassed the Zacks Consensus Estimate by 5.4%. It currently has a Zacks Rank #2.

Merck has an estimated long-term growth rate of 10.1%. MRK’s profit exceeded estimates in the last four quarters, with an average surprise of 16.8%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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