Haemonetics (HAE) Q2 2027 earnings review
Haemonetics raises its sales plan, but rising costs squeeze margins
Haemonetics, a maker of blood and plasma collection equipment and hospital devices, sped up its sales growth while higher overhead costs squeezed its margins. Sales from businesses owned a year ago rose 10%, led by an 18% jump in plasma collection kits after chief executive Chris Simon expanded a supply deal with CSL. Because of that demand, the company lifted its full-year revenue and profit-per-share plans by 3 percentage points.
| Sales from businesses owned a year ago | +10.0% up from +5.9% in Q1 |
|---|---|
| Plasma underlying sales growth | +17.7% up from +8.2% in Q1 |
| Operating margin, excluding one-offs | 26.3% down 0.4 percentage points from a year ago |
| Full-year revenue outlook | Raised 3 pts to 8–11% reported (6–9% underlying) |
⚖️ Verdict: 🟢 Bullish
The story got better because plasma demand and the CSL expansion broke the company out of mid-single-digit growth and funded another $52 million of debt paydown. The bad news: staff and shipping expenses rose 15% and ate up a one-time tariff refund, forcing management to cut its full-year operating margin expansion plan in half after missing last year's margin target too.
The question now is whether the plasma surge and higher profit margins can last once the one-time tariff refund is gone. Either the expanded CSL deal and software upgrades keep plasma growing near double digits and cover the bigger payroll, or higher customer plasma yields slow collection volumes in the second half. Third-quarter operating margin and plasma sales will tell.
🐂 Bull Case
Plasma Growth Doubled and Lifted the Year's Plan
Plasma is Haemonetics' largest business, selling collection machines and single-use kits to blood-plasma centres. Chief executive Chris Simon said "Expansion of our CSL relationship and recent innovation milestones in both Apheresis and MedSurg strengthen our competitive position and create powerful new opportunities." Sales from businesses owned a year ago in Plasma rose 17.7%, more than double the 8.2% pace in the first quarter.
That jump pushed total Apheresis (the unit combining plasma and blood-centre collection) up 13.6% in underlying sales. Because of this strength, the medical technology group raised its full-year Apheresis growth plan from a low-to-mid single-digit percentage to high single digits, lifting the company-wide underlying sales outlook by two percentage points.
What to watch: second-half underlying sales growth against the 7.0% pace implied by the full-year outlook. Another beat would show that the expanded CSL contract and software upgrades are adding revenue faster than the company's cautious collection assumptions.
Cash Generation Funded Another $52 Million Debt Paydown
Haemonetics has paused share buybacks this year to pay down its credit line after buying Vivasure Medical in January. In the second quarter, free cash flow rose 17.0% from a year ago to $103.8 million, boosted by "favorable working capital adjustments driven by the timing of payments made and cash collections".
That cash covered $51.6 million of net debt repayments in the quarter, bringing first-half repayments to $103.1 million and cutting net debt by $116.1 million since March to $863.1 million by our math. The Boston-based group also raised its full-year target for the share of profit that turns into cash from about 80% to over 80%.
What to watch: quarterly net debt repayments and interest expense in the second half. Continued debt reduction will show whether cash flow can start lowering the company's interest bill.
Hospital Devices Kept Growing Across Both Lines
MedSurg sells hospital equipment across two lines: Blood Management Technologies (devices such as TEG that test blood clotting during surgery) and Interventional Technologies (devices such as Vascade that seal blood vessels after heart procedures). MedSurg underlying sales grew 5.5% in the second quarter, matching its full-year plan for mid-single-digit growth.
Blood Management Technologies grew 7.0% on top of a 12.9% jump a year ago. Interventional Technologies grew 3.2%, accelerating slightly from 2.8% in the first quarter for a second straight quarter of growth after shrinking throughout last year. Competition in vessel closure and slower guidewire sales still keep that line below the company average.
What to watch: the sub-product revenue breakdown in the quarterly filing. It will show whether Vascade vessel-closure sales kept growing at a low-double-digit pace to offset older catheter products.
🐻 Bear Case
Staff and Freight Costs Forced a Margin Outlook Cut
Simon said "Our second-quarter and first-half results reflect significant momentum across our businesses." Yet higher sales did not lift profitability, and Haemonetics missed its own full-year operating margin target last year as well. Gross margin excluding one-offs rose 1.4 percentage points to 61.9%, helped by "tariffs refunded and the continued transformation of the product portfolio to higher-margin offerings".
- Operating expenses excluding one-offs: $127.6 million, up 15.2% from a year ago and up 1.9 percentage points of revenue to 35.7%
- Selling, general and administrative costs (overhead and sales): up 2.1 percentage points of revenue to 33.1%
- Operating margin excluding one-offs: 26.3%, down 0.4 percentage points from a year ago
Because "higher personnel-related costs and freight charges" ate up both the tariff refund and the product-mix gains, management cut its full-year operating margin expansion plan in half, from 0.5–1.0 percentage points to 0.0–0.5 percentage points.
What to watch: operating expenses as a share of revenue in the third quarter, when the one-time tariff refund does not repeat. A reading above 35% would put the lowered full-year margin plan at risk.
Interest and Acquisition Losses Held Back Profit Growth
Haemonetics has spent heavily on acquisitions in recent years, including Vivasure Medical (a maker of large-bore vessel closure devices) in January, and paid out another $17.6 million in acquisition milestone payments during the first half. Those deals and the debt used to fund them are weighing on the bottom line.
Net interest and other expense jumped 70.1% from a year ago to $12.3 million, including $1.4 million of losses from minority investments. Meanwhile, the reported tax rate rose 1.7 percentage points to 26.3% due to "valuation allowances recorded against deferred tax assets in jurisdictions with losses from recent acquisitions". As a result, profit per share excluding one-offs grew 6.3% to $1.35, trailing the 9.3% rise in reported sales.
What to watch: US regulatory approval for Vivasure's PerQseal Elite device before the fiscal year ends in March. Approval is needed to bring in revenue that offsets these acquisition losses next year.
Risks this quarter didn't answer
The earnings release did not include commentary on three standing external and legal risks that live in the conference call or the quarterly filing.
- Alternative autoimmune drugs (FcRn therapies): management's view on whether competing treatments are slowing long-term plasma demand awaits the call Q&A.
- Plasma yield vs collection volume: whether higher yields from the Persona Plus software upgrade let customers run fewer collections awaits the call.
- Plasma patent counterclaims: updates on antitrust and invalidity counterclaims from rival Fresenius Kabi await the quarterly filing's legal footnote.
💲 Other KPIs
Diluted shares fell 2.5% from a year ago, a smaller drop than the 5.5% reduction in the first quarter. Because Haemonetics bought back no shares in the first half while paying down its credit line, the share count rose by 0.8 million from last quarter, giving less lift to profit per share.
Unsold goods on hand fell 9.3% from a year ago and edged down 0.4% since the fiscal year began in March, even as quarterly sales grew 9.3%. Tighter inventory management and $15.7 million of equipment transfers to customer sites kept cash tied up in stock flat during the first half.
🔮 Guidance
Raised. The middle of the range moved up 3 percentage points to 9.5% growth, including about 2 points from an extra calendar week in the fourth quarter. By our math, that leaves 11.4% reported growth for the second half, up from 7.5% in the first half. It is the second raise this year (+1 point in Q1, +3 points in Q2).
Raised. The middle of the range rose 2 percentage points to 7.5% growth as Apheresis moved from low-to-mid single digits to high single digits, while MedSurg stayed at mid-single digits. By our math, after 8.0% growth in the first half, the plan leaves 7.0% underlying growth for the second half. Second raise this year (+1 point, +2 points).
Cut. The company halved its margin expansion target, putting the full-year operating margin excluding one-offs at 25.6% at the middle of the range (up from 25.4% last year). By our math, after 24.9% in the first half, the new plan requires 26.3% across the second half, matching the second quarter's rate.
Raised. Because Haemonetics ties its profit-per-share outlook to reported revenue growth, the 3-point revenue raise lifts the implied profit-per-share target to 8–11% ($5.36–$5.51 on last year's $4.96). After 5.5% growth in the first half, the second half must accelerate with help from the extra fourth-quarter week.
Raised. Management lifted its full-year target for free cash flow as a share of profit excluding one-offs to over 80%, after generating 124% in the first half ($142.9 million of free cash flow on $114.9 million of profit). The second half typically carries heavier capital spending.
❓ Key Questions
What drove the CSL expansion and how long does it last?
Chief executive Chris Simon credited an expanded relationship with CSL for the plasma jump. Investors need to know whether this is a multi-year supply extension, a faster rollout of Persona Plus software, or a one-time order that will fade in the second half.
Why did staff and freight expenses jump 15%?
Operating expenses excluding one-offs rose $16.8 million from a year ago, forcing a cut to the full-year margin plan. Management has not said how much of that increase is permanent hiring versus temporary shipping inflation.
How big was the second-quarter tariff refund?
Management previously pointed to a roughly $7 million tariff refund in the second quarter. Without the exact dollar figure from the call or filing, investors cannot see where gross margin stood on its own.
When will management present its new multi-year plan?
The company's previous four-year financial plan ended in March, and a promised successor plan has been delayed twice. With the CSL transition behind it and Vivasure acquired, investors lack multi-year margin and revenue targets.