Healius (ASX:HLS) share price jumps 7% following huge Q1 earnings growth

Here’s why this healthcare share is surging today…

| More on:
rising medical asx share price represented by excited doctors dancing in ward

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Healius Ltd (ASX: HLS) share price has been a strong performer on Thursday.

In morning trade, the healthcare company’s shares are up 7% to $4.90.

Why is the Healius share price surging higher?

The Healius share price is storming higher today after investors responded very positively to a first quarter trading update.

According to the release, the company has continued to experience strong demand for COVID-19 testing during the first quarter. So much so, Healius was averaging 40,000 COVID tests per working day during the period.

As you might have guessed from the Healius share price performance, this has underpinned stellar revenue and earnings growth so far in FY 2022.

The release explains that the company’s first quarter revenue increased 43.7% over the prior corresponding period to $689.9 million. And thanks to effective cost control from Phase 1 of the Sustainable Improvement Program, its underlying earnings before interest and tax (EBIT) grew 159% to $201.9 million.

What else did the company say?

While COVID testing was the biggest driver of its strong growth, it wasn’t the only part of the business performing positively.

Management advised that its non-COVID revenue was stronger than expected during the quarter despite the various lockdowns.

Healius’ CEO, Dr Malcolm Parmenter, commented: “For our communities, over and above the COVID testing efforts, Healius continues to deliver essential frontline healthcare services safely, efficiently and effectively through lockdowns and as restrictions lift.”

“With communities now learning to live with COVID and adjusting for the new normal, we expect PCR testing to continue to be pivotal to Australia’s COVID response and the gold standard for testing. As restrictions ease, even with high vaccinations levels, it is expected that the Delta strain will continue to circulate, as evidenced in other international settings. To that end, Healius has invested in additional testing equipment to meet demand for PCR testing and ensure turnaround times are as short as possible, keeping our communities safe,” he added.

What about the future?

Dr Parmenter expects COVID testing to be necessary for the foreseeable future but acknowledges that demand will fluctuate. As a result, no guidance is possible at this point.

He explained: “Looking to the remainder of FY22, we believe COVID PCR testing will be part of the health landscape for years, however, we expect that testing levels will fluctuate. There is also a level of uncertainty in relation to the impacts of economies and borders reopening. Our revenue streams may be affected, both positively and negatively, by government responses to further community outbreaks, including lockdowns, restrictions on clinical activity and the level of funding for COVID testing.“

“Given this uncertainty, we will continue to update the market periodically on our results, rather than provide profit guidance for FY22,” Dr Parmenter concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Two men laughing while bouncing on bouncy balls
Share Gainers

Why is the BrainChip share price bouncing 6% higher today?

What's causing the BrainChip share price to pop on Tuesday?

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

Why is the Lake Resources share price powering up 17% today?

What's going on with the Lake Resources share price on Tuesday?

Read more »

A Cronos Australia farmer and ASX cannabis shares investor stands in a field of cannabis plants and smiles at the camera
Share Gainers

Why is the Incannex share price spiking 8% on Tuesday?

The stock has caught a bid on Tuesday.

Read more »

A little Asian girl is so excited by the bubbles coming out of her bubble machine.
Share Gainers

Why has the Redbubble share price burst 17% higher on Monday?

What pushed the e-commerce company's shares higher today?

Read more »

A cloud with a blue arrow pointing upwards through its middle symbolising a rising asx share price
Share Gainers

Guess which ASX tech share just soared 40% on takeover news

This small-cap ASX tech share has shot up 40% today.

Read more »

Woman sits in lotus position on the sand in front of a lake as another woman leapfrogs over her.
Share Gainers

Why is the Lake Resources share price leaping 11% today?

Lake shares extend gains today.

Read more »

A beautiful woman holds up one finger with one hand and has her hand on her waist with the other as she smiles widely as though she is very pleased about something.
Share Gainers

Why Appen, Imugene, OZ Minerals, and Paradigm shares are charging higher

These ASX shares are starting the week strongly...

Read more »

A man leaps through the air with a swimming cap and a look of uncertainty.
Share Gainers

Why is the Appen share price jumping 10% on Monday?

What's going on with Appen shares?

Read more »