Home 5 News 5 Rebounds in Core Lab Services Offset Declines in COVID-19 Test Revenues

Rebounds in Core Lab Services Offset Declines in COVID-19 Test Revenues

by | Aug 31, 2022 | News, Open Content

Second quarter diagnostics earnings were down, but not as much as predicted.

With inflation, supply shortages, and shrinking COVID-19 testing demands, the second quarter of 2022 was bound to be a rough one for diagnostics companies’ earnings. And, so it was—but only a little. While not nearly as robust as a year ago when COVID-19 sales were soaring at record and unsustainable levels, revenues held up surprisingly well in Q2 2022. Against this baseline, it’s hardly surprising that 14 of the 34 companies we canvassed reported flat or negative growth for the period, including testing mega-firms:

  • Quest: down 4%
  • Labcorp: down 3.7%
  • Hologic: down 14%
  • Siemens Healthineers: down 6%
  • Becton Dickinson (BD): up less than 1%
  • PerkinElmer: up less than 1%.

But the declines were less than feared. Thus, of the decliners and flat liners, all but six met their Wall Street targets on the top line, including BD, Cue Health, Fulgent Genetics, Hologic, PerkinElmer, Qiagen, and Quest. Only slightly over 25 percent of reporting companies came in short of their Wall Street revenue estimates. Most of the misses were reported by smaller companies, with only two—Illumina and Labcorp—having revenues in the billions.

2022 Q2 Companies that Missed Their Wall Street Revenues Targets

CompanyActual RevenuesTarget Revenues
BioRad$691.1 million$704.6 million
CareDx$80.6 million$81.9 million
Illumina$1.16 billion$1.22 billion
Invitae$136.6 million$136.85 million
Labcorp$3.70 billion$3.82 billion
Lumira$44.7 million$46.7 million
NanoString$32.2 million$32.3 million
Opko Health$309.9 million$326.9 million

Most companies reported significant declines in COVID-19 testing revenues, both year-over-year (YOY) and sequentially. However, declines weren’t as substantial as predicted. A few companies offering rapid, point-of-care tests even saw their COVID earnings increase, including Abbott, where sales of the at-home BinaxNOW SARS-CoV-2 antigen tests drove 33% growth in overall diagnostics revenues, and Gingko Bioworks’ subsidiary Concentric, where K-12 school COVID-19 YOY testing revenues ballooned from $21.6 million to $96.5 million.

Of greater significance, rebounds in core revenues continue to offset COVID-19 declines.

2022 Q2 YOY Earnings: Core Lab vs COVID-19

CompanyCOVID-19 TestingBase, Excluding COVID
Becton Dickinson-400%+6%
Exact Sciences-58%+26%

It was much the same story at Hologic, where the $172.9 million in COVID-19 revenues was down significantly YOY, but not as low as expected. That performance was enough to help the company generate total earnings of $1 billion, thanks to 15 percent core growth.

See the full report, which includes a chart of each company’s earnings highlights for Q2, in the September 2022 issue of Lab Industry Report, posted in advance of digital PDF publication.