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Integra (IART) Down 13.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Integra LifeSciences (IART - Free Report) . Shares have lost about 13.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Integra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Integra Q3 Earnings Top Estimates, 2021 EPS View Up
Integra LifeSciences Holdings Corporation delivered adjusted earnings per share of 86 cents in the third quarter of 2021, up 7.5% from a year ago. The metric surpassed the Zacks Consensus Estimate by 19.4%.
The adjustment excludes the impact of certain non-recurring charges like divestiture, acquisition and integration, intangible asset amortization expenses and EU Medical Device Regulation charges, among others.
GAAP earnings per share for the third quarter was 51 cents compared with 38 cents in the year-ago quarter.
Revenue Discussion
Total revenues in the reported quarter improved 4.5% year over year to $386.9 million. The metric exceeded the Zacks Consensus Estimate by 0.5%. Organically, revenues improved 6.7% year over year.
Total reported revenues include $16.8 million from the acquisition of ACell, which was completed on Jan 20, 2021.
Notably, the quarter’s figure was in line with the company’s third-quarter sales estimate of $382-$389 million announced in July.
Segmental Details
Coming to product categories, revenues from the Codman Specialty Surgical (“CSS”) segment rose 7.2% year over year on a reported basis to $256.5 million (organically, up 8%).This improvement can be attributed to 6% growth in global neurosurgery as well as 15% growth in instruments year over year on an organic basis. Instruments sales benefited from a robust recovery in order demand. Meanwhile, strength in Neurosurgery was broad-based, including sales of the newly-launched CereLink ICP Monitor System. The segment also saw growth in international sales across all major regions compared to the prior year.
Tissue Technologies revenues totaled $130.4 million in the third quarter, down 0.4% year over year on a reported basis but up 3.7% on an organic basis. This organic growth was led by strength in burn, trauma and surgical reconstruction. During the third quarter, sales in wound reconstruction improved 1.7% on an organic basis year over year, led by Integra Skin and SurgiMend. Sales in private label increased 9% year over year owing to continued recovery in customer orders.
Margin Trend
In the reported quarter, gross profit totaled $242.4 million, up 2.9% year over year. Yet, gross margin contracted 93 basis points (bps) to 62.7%. The company-adjusted gross margin of 68.3% contracted 30 bps.
Selling, general and administrative expenses surged 3.9% to $156 million in the quarter under review, while research and development expenses rose 32.7% to $25.8 million.
Overall, adjusted operating profit was $60.6 million, down 8.1% year over year. Adjusted operating margin saw a 214-bp contraction year over year to 15.7%.
Financial Position
Integra exited the third quarter of 2021 with cash and cash equivalents of $470.2 million, up from $397.4 million at the end of second-quarter 2021.
Cumulative net cash flow from operating activities at the end of the third quarter was $243.2 million compared with $123.6 million in the year-ago period.
2021 Outlook
The company has updated its financial guidance for 2021, taking into account pandemic-related uncertainty across all markets and product lines.
For 2021, the company has reaffirmed its earlier-projected revenue guidance at the band of $1.54-$1.55 billion. However, it expects to report at the low end of this range. The Zacks Consensus Estimate for the same is pegged at $1.54 billion.
The company expects to report adjusted earnings per diluted share in the band of $3.16 to $3.20 for 2021, improving from the previously announced range of $2.98 to $3.05.The Zacks Consensus Estimate for the same is pegged at $3.15.
Q4 Outlook
For the fourth quarter of 2021, Integra expects revenues of $403 million, reflecting 3.5% growth on a reported basis and 6.5% growth on an organic basis. The Zacks Consensus Estimate for the same is pegged at 404.5 million.
Adjusted earnings per share are estimated in the range of 82 cents to 86 cents, the Zacks Consensus Estimate for which is pegged at 84 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Integra has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Integra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Integra (IART) Down 13.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Integra LifeSciences (IART - Free Report) . Shares have lost about 13.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Integra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Integra Q3 Earnings Top Estimates, 2021 EPS View Up
Integra LifeSciences Holdings Corporation delivered adjusted earnings per share of 86 cents in the third quarter of 2021, up 7.5% from a year ago. The metric surpassed the Zacks Consensus Estimate by 19.4%.
The adjustment excludes the impact of certain non-recurring charges like divestiture, acquisition and integration, intangible asset amortization expenses and EU Medical Device Regulation charges, among others.
GAAP earnings per share for the third quarter was 51 cents compared with 38 cents in the year-ago quarter.
Revenue Discussion
Total revenues in the reported quarter improved 4.5% year over year to $386.9 million. The metric exceeded the Zacks Consensus Estimate by 0.5%. Organically, revenues improved 6.7% year over year.
Total reported revenues include $16.8 million from the acquisition of ACell, which was completed on Jan 20, 2021.
Notably, the quarter’s figure was in line with the company’s third-quarter sales estimate of $382-$389 million announced in July.
Segmental Details
Coming to product categories, revenues from the Codman Specialty Surgical (“CSS”) segment rose 7.2% year over year on a reported basis to $256.5 million (organically, up 8%).This improvement can be attributed to 6% growth in global neurosurgery as well as 15% growth in instruments year over year on an organic basis. Instruments sales benefited from a robust recovery in order demand. Meanwhile, strength in Neurosurgery was broad-based, including sales of the newly-launched CereLink ICP Monitor System. The segment also saw growth in international sales across all major regions compared to the prior year.
Tissue Technologies revenues totaled $130.4 million in the third quarter, down 0.4% year over year on a reported basis but up 3.7% on an organic basis. This organic growth was led by strength in burn, trauma and surgical reconstruction. During the third quarter, sales in wound reconstruction improved 1.7% on an organic basis year over year, led by Integra Skin and SurgiMend. Sales in private label increased 9% year over year owing to continued recovery in customer orders.
Margin Trend
In the reported quarter, gross profit totaled $242.4 million, up 2.9% year over year. Yet, gross margin contracted 93 basis points (bps) to 62.7%. The company-adjusted gross margin of 68.3% contracted 30 bps.
Selling, general and administrative expenses surged 3.9% to $156 million in the quarter under review, while research and development expenses rose 32.7% to $25.8 million.
Overall, adjusted operating profit was $60.6 million, down 8.1% year over year. Adjusted operating margin saw a 214-bp contraction year over year to 15.7%.
Financial Position
Integra exited the third quarter of 2021 with cash and cash equivalents of $470.2 million, up from $397.4 million at the end of second-quarter 2021.
Cumulative net cash flow from operating activities at the end of the third quarter was $243.2 million compared with $123.6 million in the year-ago period.
2021 Outlook
The company has updated its financial guidance for 2021, taking into account pandemic-related uncertainty across all markets and product lines.
For 2021, the company has reaffirmed its earlier-projected revenue guidance at the band of $1.54-$1.55 billion. However, it expects to report at the low end of this range. The Zacks Consensus Estimate for the same is pegged at $1.54 billion.
The company expects to report adjusted earnings per diluted share in the band of $3.16 to $3.20 for 2021, improving from the previously announced range of $2.98 to $3.05.The Zacks Consensus Estimate for the same is pegged at $3.15.
Q4 Outlook
For the fourth quarter of 2021, Integra expects revenues of $403 million, reflecting 3.5% growth on a reported basis and 6.5% growth on an organic basis. The Zacks Consensus Estimate for the same is pegged at 404.5 million.
Adjusted earnings per share are estimated in the range of 82 cents to 86 cents, the Zacks Consensus Estimate for which is pegged at 84 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Integra has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Integra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.