IDEXX grew third-quarter revenue 10% to about $1.21 billion, led by an 11% gain in recurring diagnostics sales to vets, and shares rose about 16% in early Monday trading. It raised its revenue range but trimmed its operating margin outlook, so the $0.25 lift to its EPS forecast rests on a lower tax rate, less interest expense and fewer shares rather than on testing demand. Operating margin was 33.1% versus 32.1% a year earlier, and diluted EPS rose 18% to $4.01 from $3.40. VetLab consumables grew 14% and made up more than half of the recurring gain, while the revised outlook implies little or no margin improvement in the fourth quarter as IDEXX absorbs costs from its CoVet software deal. The article suggests watching fourth-quarter operating margin and rapid assay products, where testing volumes fell this quarter.
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