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Quidel Corp. (QDEL) stock plunges in the pre-market trading. Why is the stock coming down?

Quidel Corp. (NASDAQ: QDEL) stock declined by 5.08% at the last trading close while the QDEL stock price continued to decline by 1.73% in the pre-market trading session after Quidel released its preliminary first-quarter results of 2021. Quidel Corporation is a leading provider of medical solutions at the point of treatment, offering a range of fast testing methods that help to increase health care quality around the world.

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What is happening?

On April 23, 2021, QDEL announced its preliminary results for the first quarter of 2021. Revenues in the first quarter of 2021 are expected to be in the range of $374 million to $376 million, up 114 percent from $174.7 million in the previous quarter. Quidel shipped nearly 15 million SARS tests in the third quarter, which compares favorably to the performance of its industry peers. COVID-19 sales are forecast to exceed $280 million in the first quarter of 2021, compared to $1.0 million in the first quarter of 2020.

The lack of a respiratory season in the first quarter of 2021 resulted in reduced prices of influenza and other respiratory disease drugs. Influenza sales is forecast to be $5 million in the first quarter of 2021, compared to $79.6 million in the first quarter of 2020. Additionally, gross margins are forecast to be about 80% for the year, with profit increases of more than 300 percent over the previous year.

Douglas Bryant, president and chief executive officer of Quidel Corporation, commented:

QDEL has changed its market over the last year with new product introductions that are both creative and well-executed. On all accounts, the first quarter of 2021 represented demand-side and manufacturing power, with sales more than doubling year over year and gross profit and net income growing even faster. The operational environment remained fluid as the COVID-19 pandemic response progressed, making it impossible to forecast research demand with confidence. Since there was no circulating influenza in the population, along with the COVID-19 instability, sales were significantly lower than anticipated.

He added,

Although QDEL will not have an updated financial forecast for the full year 2021 due to market uncertainty and its effect on its performance, Quidel looks forward to addressing the critical sales growth factors they face in greater depth during their scheduled first quarter 2021 earnings call on May 6, 2021.

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