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CONMED (CNMD) Down on In-Line Q3 Earnings & Lower 2022 View
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CONMED Corporation (CNMD - Free Report) delivered adjusted earnings per share (EPS) of 77 cents in third-quarter 2022, beating the Zacks Consensus Estimate of 75 cents by 2.7%. The bottom line declined 3.8% from the year-ago quarter’s levels.
GAAP EPS for the quarter was $1.48 compared to earnings of 47 cents per share in the year-ago quarter.
Revenues in Detail
CONMED’s third-quarter revenues were $275.1 million, up 10.6% year over year. The top line missed the Zacks Consensus Estimate by 2.5%.
At the constant exchange rate (“CER”), revenues increased 12.1%.
Segment Details
Revenues in the Orthopedic Surgery segment totaled $118.6 million, up 12.2% from the year-ago quarter on a reported basis. At CER, revenues increased 14%.
Orthopedics revenues improved 20.4% on a reported basis on the domestic front while gaining 7.6% (up 10.4% at CER) from the prior-year quarter’s levels on the international front.
CONMED Corporation Price, Consensus and EPS Surprise
Revenues in the General Surgery segment amounted to $156.5 million, up 9.4% year over year on a reported basis and 10.7% at CER.
Domestically, General Surgery sales increased 11.8% year over year, while international sales advanced 4% on a reported basis (up 8.5% at CER).
Sales by Geography
In the reported quarter, sales in the United States amounted to $155.7 million, up 14.2% year over year. International sales were $119.4 million, up 6.2% year over year on a reported basis and 17.2% at CER.
Margins
In the quarter under review, CONMED’s gross profit rose 6.5% to $151.6 million. The gross margin declined 210 basis points (bps) to 55.1%.
Selling & administrative expenses increased 9.4% to $114.6 million. Research and development expenses rose 17.8% year over year to $12.8 million.
Operating profit totaled $24.2 million, down 9.2% from the prior-year quarter’s figure. The operating margin declined 190 bps to 8.8%.
2022 Guidance Revised
CONMED tightened its guidance for revenues and lowered the same for adjusted earnings in 2022, reflecting the anticipated negative impact of foreign currency movement.
The company now projects full-year 2022 revenues in the range of $1.1-$1.115 billion (the previous guidance was $1.095-$1.14 billion). The Zacks Consensus Estimate is currently pegged at $1.12 billion.
Adjusted EPS for the full year is now expected in the range of $3.21-$3.28 (down from the previously projected band of $3.25-$3.45). The Zacks Consensus Estimate currently stands at $3.29.
Shares of CONMED were down 4.1% during after-hours trading on Oct 26, following the weaker third-quarter revenues and guidance for 2022. The company’s shares have declined 41.2% so far this year compared with the industry’s fall of 16.7%.
Image Source: Zacks Investment Research
Our Take
CONMED exited the third quarter with a strong segmental performance. While earnings beat the Zacks Consensus Estimate, revenues missed the same. The company witnessed strong performances across its Orthopedic and General Surgery units. It saw sales growth in both its domestic and overseas markets. Expansion of both gross and operating margins bodes well for the stock.
Meanwhile, the continued inflationary and supply chain challenges in the third quarter do not augur well. The unfavorable currency movement is expected to have a negative impact of 150-180 bps on full-year revenue growth. CONMED operates in a highly-competitive environment, especially with respect to the General Surgery business, which raises further apprehension.
Zacks Rank and Stocks to Consider
Currently, CONMED carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Accuray (ARAY - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Accuray reported fourth-quarter fiscal 2022 adjusted loss per share of 4 cents, which surpassed the Zacks Consensus Estimate by 33.3%. Fourth-quarter revenues of $110 million outpaced the Zacks Consensus Estimate by 4.9%. It currently has a Zacks Rank #2.
Accuray has an estimated growth rate of 100% for fiscal 2023. ARAY’s earnings surpassed estimates in three of the trailing four quarters and lagged the same in one, the average surprise being 20.8%.
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CONMED (CNMD) Down on In-Line Q3 Earnings & Lower 2022 View
CONMED Corporation (CNMD - Free Report) delivered adjusted earnings per share (EPS) of 77 cents in third-quarter 2022, beating the Zacks Consensus Estimate of 75 cents by 2.7%. The bottom line declined 3.8% from the year-ago quarter’s levels.
GAAP EPS for the quarter was $1.48 compared to earnings of 47 cents per share in the year-ago quarter.
Revenues in Detail
CONMED’s third-quarter revenues were $275.1 million, up 10.6% year over year. The top line missed the Zacks Consensus Estimate by 2.5%.
At the constant exchange rate (“CER”), revenues increased 12.1%.
Segment Details
Revenues in the Orthopedic Surgery segment totaled $118.6 million, up 12.2% from the year-ago quarter on a reported basis. At CER, revenues increased 14%.
Orthopedics revenues improved 20.4% on a reported basis on the domestic front while gaining 7.6% (up 10.4% at CER) from the prior-year quarter’s levels on the international front.
CONMED Corporation Price, Consensus and EPS Surprise
CONMED Corporation price-consensus-eps-surprise-chart | CONMED Corporation Quote
Revenues in the General Surgery segment amounted to $156.5 million, up 9.4% year over year on a reported basis and 10.7% at CER.
Domestically, General Surgery sales increased 11.8% year over year, while international sales advanced 4% on a reported basis (up 8.5% at CER).
Sales by Geography
In the reported quarter, sales in the United States amounted to $155.7 million, up 14.2% year over year. International sales were $119.4 million, up 6.2% year over year on a reported basis and 17.2% at CER.
Margins
In the quarter under review, CONMED’s gross profit rose 6.5% to $151.6 million. The gross margin declined 210 basis points (bps) to 55.1%.
Selling & administrative expenses increased 9.4% to $114.6 million. Research and development expenses rose 17.8% year over year to $12.8 million.
Operating profit totaled $24.2 million, down 9.2% from the prior-year quarter’s figure. The operating margin declined 190 bps to 8.8%.
2022 Guidance Revised
CONMED tightened its guidance for revenues and lowered the same for adjusted earnings in 2022, reflecting the anticipated negative impact of foreign currency movement.
The company now projects full-year 2022 revenues in the range of $1.1-$1.115 billion (the previous guidance was $1.095-$1.14 billion). The Zacks Consensus Estimate is currently pegged at $1.12 billion.
Adjusted EPS for the full year is now expected in the range of $3.21-$3.28 (down from the previously projected band of $3.25-$3.45). The Zacks Consensus Estimate currently stands at $3.29.
Shares of CONMED were down 4.1% during after-hours trading on Oct 26, following the weaker third-quarter revenues and guidance for 2022. The company’s shares have declined 41.2% so far this year compared with the industry’s fall of 16.7%.
Image Source: Zacks Investment Research
Our Take
CONMED exited the third quarter with a strong segmental performance. While earnings beat the Zacks Consensus Estimate, revenues missed the same. The company witnessed strong performances across its Orthopedic and General Surgery units. It saw sales growth in both its domestic and overseas markets. Expansion of both gross and operating margins bodes well for the stock.
Meanwhile, the continued inflationary and supply chain challenges in the third quarter do not augur well. The unfavorable currency movement is expected to have a negative impact of 150-180 bps on full-year revenue growth. CONMED operates in a highly-competitive environment, especially with respect to the General Surgery business, which raises further apprehension.
Zacks Rank and Stocks to Consider
Currently, CONMED carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health, Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Accuray (ARAY - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Elevance Health has an earnings yield of 5.5% against the industry’s (2.3%). ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, having a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $384 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 22.7% for 2022. MEDP’s earnings surpassed estimates in the trailing four quarters, the average being 22.04%.
Accuray reported fourth-quarter fiscal 2022 adjusted loss per share of 4 cents, which surpassed the Zacks Consensus Estimate by 33.3%. Fourth-quarter revenues of $110 million outpaced the Zacks Consensus Estimate by 4.9%. It currently has a Zacks Rank #2.
Accuray has an estimated growth rate of 100% for fiscal 2023. ARAY’s earnings surpassed estimates in three of the trailing four quarters and lagged the same in one, the average surprise being 20.8%.