On July 24, 2019 QIAGEN N.V. (NYSE: QGEN; Frankfurt Prime Standard: QIA) reported results of operations for the second quarter of 2019, achieving the outlook set for net sales growth and adjusted earnings per share at constant exchange rates (CER) (Press release, Qiagen, JUL 24, 2019, View Source [SID1234537744]).

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QIAGEN also announced that it intends to restructure the current format of its next-generation sequencing (NGS) partnership in China due to the slower-than-expected uptake of in-vitro diagnostic clinical sequencing in this country. Sales from this partnership were planned to be approximately $30 million CER for full-year 2019, and weighted primarily to the second half of this year.

As a result, QIAGEN now expects full-year 2019 net sales growth of approximately 5-6% CER (previously about 7-8% CER) and adjusted diluted EPS of approximately $1.42-1.44 CER per share (previously about $1.45-1.47 CER). For the third quarter of 2019, QIAGEN expects net sales to grow approximately 4-5% CER. Adjusted diluted EPS is expected to be about $0.35-0.36 CER per share.

As previously announced, QIAGEN intends to release its full results for the second quarter and first half of 2019 on Tuesday, July 30, at approximately 22:05 Central European Time (CET) / 21:05 GMT / 16:05, and to hold an investor call as planned on Wednesday, July 31, at (EDT) at 15:00 Central European Time (CET) / 14:00 GMT / 9:00 Eastern Daylight Time (EDT). A live webcast will be made available at this website, and a replay will also be made available after the event.
Second quarter 2019 results in line with outlook
Total net sales rose 1% to $381.6 million in the second quarter of 2019 from $377.2 million in the second quarter of 2018, and grew 5% CER, in line with the outlook for 5% CER growth. The adverse currency movements against the U.S. dollar were in line with QIAGEN’s publicly announced expectations.
Instruments (+9% CER / 12% of sales) led the performance ahead of consumables and related revenues (+4% CER / 88% of sales). Instrument sales rose 15% CER excluding third-party instrument service contracts, led by contributions from the QIAstat-Dx multiplex system launched in 2018 as well as the new QIAcube Connect sample processing instrument launched in early 2019. Molecular Diagnostics (+5% CER / 49% of sales) had double-digit CER growth in instrument sales, while consumables and related revenues rose at a mid-single-digit CER pace. As expected, sales of the QuantiFERON-TB test rose 6% CER in the second quarter of 2019, which was below the annual target of at least 15% CER growth due to the very strong year-ago growth amid the transition to the fourth-generation test version. Also weighing on growth was a decline of 21% CER in revenues from companion diagnostic co-development projects, to $11 million in the quarter. Life Sciences (+5% CER / 51% of sales) benefitted from Pharma (+4% CER / 20% of sales) growth on mid-single-digit CER gains in consumables and related revenues and low-single-digit CER growth in instruments, while Academia / Applied Testing (+5% CER / 31% of sales) had double-digit CER growth in instruments and mid-single-digit growth in consumables.
Operating income was $60.2 million compared to $53.3 million in the same quarter of 2018. Adjusted operating income – which excludes amortization of intangible assets acquired in business combinations and other items such as business integration, acquisition-related costs, litigation costs and restructuring – fell 2% to $99.1 million in the second quarter of 2019, absorbing significant investments for the QIAstat-Dx

multiplex system and development of the new digital PCR system planned for launch in 2020. The adjusted operating income margin was 26.0% of sales compared to 26.8% in the same quarter of 2018.
Net income was $44.7 million in the second quarter of 2019, or $0.19 per diluted share (based on 232.7 million diluted shares), compared to $36.8 million, or $0.16 per share (based on 233.8 million diluted shares) in the second quarter of 2018. Adjusted net income was $77.4 million, or $0.33 per diluted share ($0.34 CER, and in line with the outlook for approximately $0.33-0.34 CER), compared to $77.2 million, or $0.33 per diluted share, in the prior-year quarter, with an adjusted tax rate of 20% in both periods.