Trinity Biotech’s Share Price Up Amid Revenue Drop

Trinity Biotech (NASDAQ:TRIB) released its Q3 2018 financial results on Tuesday (October 23), highlighting a 34.6 percent drop in point-of-care revenue.

Other highlights include: lower cost of sales, cash position and operating profit as compared to Q3 2017. Total revenue also dropped by 7.4 percent.

The point-of-care was lower due to lower HIV sales in Africa from “normal fluctuations in ordering patterns” in the market, according to the press release. It was also caused from higher than usual revenue from the same quarter in 2017.

Point-of-care revenue dropped from US$4.5 to US$3 million and overall revenue from US$25.6 million to US$23.7. The clinical laboratory sales also decreased from US$21 million to US$20.7 million.

“[Point-of-care revenue] was also heavily impacted by a significant fall in the value of the Brazilian Real,” Kevin Tansley, chief financial officer, said in the press release. Indirect costs were US$0.7 million lower than the compared quarter, he added.

The company predicts clinical laboratory revenue would have increased by 0.4 percent, had the Real been more stable.

Trinity’s CEO, Ronan O’Caoimh, shared similar sentiments about the lower revenues, but added the company’s haemoglobins and autoimmune revenues grew.

“During the quarter, we repurchased US$15.1 million of our exchangeable notes for cash consideration of US$12 million,” he explained. By doing this, the company took advantage of the discount versus nominal values in order to save US$3.1 million.

The total profit over the quarter was US$900,000 which represents 4.3 cents per share. As for other figures, the lower cost of sales dropped from US$14.6 million to US$13.7 million. The cash position dropped from US$62.5 million to US$35.6 and the operating profit dropped from US$1.5 million to US$1.2 million.

Also reported in the financial results were two US Food and Drug Administration (FDA) approvals for two new products, the HEp-2 Elite and Immulisa RNA polymerase III. The first is a screening test for antinuclear antibodies whereas the latter diagnosis sclerosis through biomarkers.

Trinity develops and manufactures diagnostic products through the point-of-care and clinical laboratory markets globally. The products span from point-of-care, infectious disease to antibodies and proteins and emergency medicine among others.

Investor takeaway

Over the trading period on Tuesday investors have shown enthusiasm to Trinity, which saw a stock price increase of nearly 12 percent in value to close the trading session at US$3.25.

According to TipRanks, in the last seven months, only one analyst has issued a note to investors. Nicholas Jansen with Raymond James issued a “Buy” position on the company with a US$7 price target.

Investors can look forward to hearing about the company’s Q4 and full year 2018 financial results to see the full impact on the revenue.

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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.