QuidelOrtho Stock Gains Following Q1 Earnings Beat, Margins Expand

Core Viewpoint - QuidelOrtho Corporation reported strong adjusted earnings per share (EPS) of 74 cents for Q1 2025, reflecting a 68.2% year-over-year increase and surpassing the Zacks Consensus Estimate by 27.6% [1] Financial Performance - Revenues for Q1 2025 were $692.8 million, a decrease of 2.6% year-over-year, but slightly above the Zacks Consensus Estimate by 0.3% [2] - Respiratory revenues were $119.8 million, down 12.8% year-over-year, while Non-Respiratory revenues were $573 million, down 0.1% but up 1.7% at constant exchange rates [2] - Adjusted gross profit improved 2.7% year-over-year to $346.9 million, with an adjusted gross margin of 50.1%, an increase of 260 basis points [9] - Adjusted operating profit totaled $107.6 million, a 36% improvement from the prior year, with an adjusted operating margin of 15.5%, up 440 basis points [10] Business Unit Performance - Labs revenues were $373.1 million, up 4.5% year-over-year [4] - Immunohematology revenues were $128.5 million, up 1.2% year-over-year [5] - Donor Screening revenues were $12.8 million, down 61.6% year-over-year [5] - Point of Care revenues were $170.8 million, down 8.5% year-over-year [5] - Molecular Diagnostics revenues totaled $7.6 million, up 5.6% year-over-year [6] Geographical Performance - North America revenues were $406.7 million, down 6.3% year-over-year [7] - EMEA revenues were $88.9 million, up 4.8% year-over-year [7] - Revenues from China were $75 million, down 1.4% year-over-year [8] - Other regions generated $122.2 million, up 5.2% year-over-year [8] Financial Position - Cash and cash equivalents at the end of Q1 2025 were $127.1 million, up from $98.3 million at the end of 2024 [11] - Total debt at the end of Q1 2025 was $2.49 billion, slightly up from $2.48 billion at the end of 2024 [11] - Net cash provided by operating activities was $65.6 million, compared to a net cash used of $0.7 million a year ago [11] Guidance and Outlook - QuidelOrtho expects total revenues for 2025 to be in the range of $2.60 billion to $2.81 billion, with a consensus estimate of $2.70 billion [12] - The company anticipates stable growth across most business lines, particularly in Labs and Immunohematology, with expected COVID-19 revenues of $110-$140 million for 2025 [13][14] - Management expressed confidence in mitigating a projected gross tariff impact of $30–$40 million in 2025 through various strategies [17]