Integra LifeSciences Holdings Corporation (IART Quick QuoteIART - Free Report) delivered adjusted earnings per share (EPS) of 55 cents in the first quarter of 2024, down 25.7% year over year. The metric was in line with the Zacks Consensus Estimate.

The adjustment excludes the impact of certain non-recurring charges like structural optimization charges, the Boston recall and EU Medical Device Regulation charges.

GAAP loss per share in the first quarter was 4 cents against GAAP EPS of 29 cents in the year-ago quarter.

Revenue Discussion

Total revenues in the reported quarter dropped 3.2% year over year to $368.9 million. The metric topped the Zacks Consensus Estimate by 1.9%. Organically, revenues fell 2.5% year over year. Revenues increased 1.6% on an organic basis, excluding Boston.

Segmental Details

Coming to product categories, revenues in the Codman Specialty Surgical (CSS) segment rose 3.3% year over year on a reported basis to $256.4 million (organically, up 4.4%). The upside can be attributed to mid-single-digit growth in CSF management driven by Certas Plus valves and low-double-digit growth in neuro monitoring propelled by CereLink, mid-single-digit growth in Dural Access and Repair driven by DuraGen.

Tissue Technologies revenues totaled $112.4 million in the first quarter, down 15.3% year over year on a reported basis and 15.3% on an organic basis. The downside was due to the impact of the lost revenues related to the Boston product recall, which was partially offset by triple-digit growth for DuraSorb and mid-double-digit growth in Gentrix.

Margin Trend

In the reported quarter, gross profit totaled $206.8 million, down 11.2% year over year. The gross margin contracted 507 basis points (bps) to 56.1%.

Selling, general and administrative expenses dropped 0.5% to $165.8 million in the quarter under review, while research and development expenses rose 0.9% to $26.9 million.

Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise

Integra LifeSciences Holdings Corporation price-consensus-eps-surprise-chart | Integra LifeSciences Holdings Corporation Quote

Overall, adjusted operating profits were $14.1 million, down 64.4% year over year. Adjusted operating margin saw a 655-bps contraction year over year to 3.8%.

Financial Position

Integra exited first-quarter 2024 with cash and cash equivalents of $591.9 million, up from $276.4 million at the end of fourth-quarter 2023.

Cumulative net cash flow from operating activities at the end of first-quarter 2024 was $157.6 million compared with $261.6 million at the end of fourth-quarter 2023.

Guidance

The company updated its financial guidance for 2024.

For the full year 2024, IART now projects revenues in the band of $1.67-$1.69 billion (up from the previous guidance of $1.60-$1.62 billion). This suggests reported growth of 8.4% to 9.4%, with organic growth of 3.3% to 4.3%. The Zacks Consensus Estimate for the same is pegged at $1.61 billion.

The company projects adjusted EPS guidance for 2024 in the $3.01-$3.11 (down from previous guided range of $3.15-$3.25). The Zacks Consensus Estimate for the metric is pegged at $3.19.

The company also provided a second-quarter 2024 outlook.

For the second quarter of 2024, Integra expects reported revenues in the range of $411-$416 million, suggesting reported growth of 7.8% to 9.1% and organic growth of 1.3% to 2.6%. The Zacks Consensus Estimate for the same is pegged at $398.5 million.

Adjusted earnings per diluted share are expected in the range of 60-65 cents. The Zacks Consensus Estimate for the metric is pegged at 76 cents.

Our Take

Integra exited the first quarter of 2024 on a mixed note, with in-line earnings and revenues beat.  The company witnessed strong demand for Integra's diverse portfolio of leading brands and continued successful market adoption of CereLink. During the reported quarter, Integra also maintained growth momentum in International and expanded its international portfolio for CUSA, CereLink, DuraSeal and MediHoney. During the first quarter, Integra completed the acquisition of Acclarent, building a leadership position for Integra in the ENT segment and providing immediate scale and accretive growth via a dedicated sales channel.

Unfavorable product and geographic mix and Boston quality project expenses are exerting pressure on the bottom line. The contraction of both margins is discouraging.

Zacks Rank & Key Picks

Integra currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. (ALGN Quick QuoteALGN - Free Report) , ResMed Inc. (RMD Quick QuoteRMD - Free Report) and Boston Scientific Corporation (BSX Quick QuoteBSX - Free Report) .

Align Technology, carrying a Zacks Rank of 2, reported first-quarter 2024 adjusted EPS of $2.14, beating the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.

ResMed reported third-quarter of fiscal 2024 adjusted EPS of $2.13, beating the Zacks Consensus Estimate by 10.9%. Revenues of $1.19 billion surpassed the Zacks Consensus Estimate by 1.9%. It currently sports a Zacks Rank #1.

ResMed has a long-term estimated growth rate of 10.9%. RMD’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.8%.

Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, beating the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. It currently carries a Zacks Rank #2.

Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.5%.