5 Revealing Analyst Questions From QuidelOrtho's Q3 Earnings Call

QuidelOrtho’s third quarter was marked by a positive market reaction, reflecting solid execution despite a year-on-year decline in reported sales. Management attributed the quarter’s underlying strength to sustained growth in core labs, immunohematology, and point-of-care product lines, excluding COVID and donor screening. CEO Brian Blaser emphasized, “We reported organic sales growth of 5%, excluding COVID sales and the U.S. donor screening business that we are in the process of exiting.” Margin improvement was driven by cost-saving initiatives and a disciplined commercial strategy, enabling the company to mitigate the impact of declining respiratory revenue.

Is now the time to buy QDEL? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From QuidelOrtho’s Q3 Earnings Call

• Andrew Brackmann (William Blair) asked about competitive wins in labs and the impact of the high-sensitivity troponin assay. CEO Brian Blaser said these wins were spread globally and the assay strengthens their cardiac panel, though short-term growth impact will be limited.
• Lu Li (UBS) inquired about sequential margin trends and instrument performance. CFO Joseph Busky explained that Q4 margins may dip due to higher instrument sales and incentive compensation, while instrument revenue was slightly down year-over-year.
• Jack Meehan (Nephron Research) questioned the durability of Sofia and flu combo tests. Blaser highlighted the stable and expanding installed base, indicating confidence in another solid respiratory season.
• Jack Melick (Jefferies) sought clarity on immunohematology growth sustainability and LEX Diagnostics’ future margin effects. Busky said immunohematology should normalize to 3-4% annual growth and LEX will likely be margin dilutive initially.
• Brendan (Citi) asked about the wind-down of the U.S. donor screening business and integrated analyzer opportunity. Busky noted the donor screening exit will become a tailwind to margins as costs are removed, while Blaser sees significant runway for integrated system placements.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be tracking (1) the pace of adoption for new assays and platforms like the VITROS high-sensitivity troponin and LEX Diagnostics, (2) progress on cost containment and facility consolidation efforts to drive margin improvement, and (3) the normalization of the U.S. donor screening exit and its impact on the topline and margin mix. The trajectory of international growth and the timing of respiratory season demand will also influence performance milestones.

QuidelOrtho currently trades at $21.83, down from $27.40 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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