IDEXX Labs (NASDAQ: IDXX) reported Q4 EPS of $0.43, versus $0.73 reported last year. Revenue for the quarter came in at $506.12 million versus the consensus estimate of $490.49 million.

• Achieves revenue growth in Q4 of 14% on a reported basis and 12% on an organic basis, driven by CAG Diagnostics recurring revenue growth of 15% reported and 13% organic
• Reports unprecedented 3,650 premium instrument placements in Q4, representing 15% year-over-year growth, supported by 25% growth in Catalyst® placements and 37% growth in SediVue Dx® placements to 747 units
• Delivers full year diluted EPS of $2.94, including $31 million or a $0.34 per share one-time charge related to U.S. Tax Reform. Full year 2017 EPS increased 20% year over year on a reported basis and 21% on a comparable constant currency basis
• Increases 2018 revenue guidance by $65 million to $2,205 million - $2,245 million, reflecting expected reported revenue growth of 12% - 14% and organic revenue growth of 9.5% - 11.5%
• Raises 2018 EPS outlook range by $0.55 from the midpoint of prior guidance to $4.04 - $4.18, reflecting expectations for continued strong operating performance, a lower effective tax rate related to U.S. Tax Reform, and benefits from foreign exchange

2018 Financial Outlook

The Company is increasing its 2018 revenue outlook by $65 million to $2,205 million - $2,245 million, or reported growth of 12% - 14%, reflecting its strong 2017 performance, an estimated $10 million benefit from the New Revenue Standard, and an estimated $35 million benefit related to updated assumptions for foreign exchange rates, as noted below. At these new rate assumptions compared to market rates in 2017, we estimate that the effect of the weaker U.S. dollar will benefit 2018 reported revenue growth by approximately 2.0% - 2.5%, EPS growth by approximately 4%, and EPS by an estimated $0.12 per share, including the net impact from projected hedge losses of approximately $7 million in 2018.

We are increasing our 2018 EPS outlook to $4.04 - $4.18 per share, an increase of $0.55, or targeted growth of 37% - 42% on a reported basis and 29% - 33% on a comparable constant currency basis. The Company is projecting free cash flow at approximately 80% - 85% of net income in 2018, including an estimated 15% impact related to $50 million of incremental capital spending related to our Westbrook, Maine headquarters expansion and the relocation and expansion of our core laboratory in Germany, in addition to approximately $5 million in additional funding of our capital plan to support incremental growth initiatives. For 2018, the Company projects capital spending of approximately $140 million.

The updated guidance for 2018 reflects recent trends, and assumes that the value of the U.S. dollar relative to other currencies will be: the euro at $1.22; the British pound at $1.40; the Canadian dollar at $0.79; the Australian dollar at $0.78; the Japanese yen at ¥111; the Chinese renminbi at RMB 6.45; and the Brazilian real at R$3.21 to the U.S. dollar for the full year of 2018.

GUIDANCE:

IDEXX Labs sees FY2018 EPS of $4.04-$4.18, versus the consensus of $3.76. IDEXX Labs sees FY2018 revenue of $2.205-2.245 billion, versus the consensus of $2.16 billion.

For earnings history and earnings-related data on IDEXX Labs (IDXX) click here.