Shares of Myriad Genetics (MYGN), a molecular diagnostics group, plunged in early trade as the firm cut its full-year outlook, and fiscal first-quarter results missed guidance because of an “administrative” change that hit sales accruals.
Sales fell to $186.3 million during the three months that ended September 30, from $202.3 million a year ago, the Salt Lake City-based company said in its earnings statement. That result also lagged the $202.3 million estimate compiled by Capital IQ.
Adjusted earnings per share plummeted to $0.08 from $0.43 per share a year earlier, missing the $0.31 forecast.
“We had a challenging start to fiscal 2020 as hereditary cancer revenue accrual from small payers was impacted by the deletion of the historical hereditary cancer codes,” Chief Executive Officer Mark Capone said. “We had assumed this administrative change would have a minor impact [on] cash collections but, unfortunately, that has not proven to be the case.”
While the hereditary cancer business has returned to “strong” double-digit volume growth, the group said that the sales accrual impact of these changes led to a cut in its sales and earnings forecasts for the year.
In the fiscal second quarter, Myriad expects adjusted earnings per share to come in the range of $0.30 to $0.32 on a revenue forecast of $210 million to $212 million. That’s below market guidance for sales of $0.48 and a net income of $218.5 million, as per estimates polled by Yahoo Finance.
In fiscal 2020 too, the firm anticipates adjusted earnings per share of $1.00 to $1.10 and revenue of $800 million to 810 million, both lagging the net income estimate of $1.82 and consensus sales of $872.4 million from analysts surveyed by Yahoo Finance.
“We expect earnings to be significantly higher in the second half and a number of important upsides will materialize during the fiscal year, generating momentum as we transition [to] 2021,” Capone said.
Nevertheless, shares of the company plunged by 35% in early trade.
This post was originally published on Health Opinion