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Wright Medical Group (WMGI) Q3 Earnings In Line, Sales Miss

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Wright Medical Group N.V. reported adjusted loss of 16 cents per share in the third quarter of 2017, in line with the Zacks Consensus Estimate. Also, the figure was narrower by 3 cents on a year-over-year basis.

Net sales in the third quarter totaled $171 million, which missed the Zacks Consensus Estimate of $174 million.

Quarter in Detail

Wright Medical reports revenues under the Total Extremities & Biologics segment.

Consolidated sales at the segment in the United States increased 7.5% from the year-ago quarter to almost $126.9 million. Internationally, sales in the extremities and biologics business were up 11.1% year over year to $43.6 million.

 

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Total Extremities & Biologics includes four sub-segments — Lower Extremities, Upper Extremities, Biologics and Sports Med & Other.

Lower Extremities: Sales at the segment declined 0.6% on a year-over-year basis to $65.4 million in the quarter. The U.S. lower extremities business sales fell 0.3% in the third quarter. Internationally, lower extremities sales declined 1.7% on a year-over-year basis.

Upper Extremities: Sales at the segment increased 19.6% on a year-over-year basis to $76 million in the quarter under review. The U.S. upper extremities business grew 18.6% on a year-over-year basis. Also, Upper extremities sales increased 22.3% on a year-over-year basis, internationally.

Biologics: Sales at the segment rose 3.7% on a year-over-year basis to $23.8 million in the quarter. The U.S. biologics business grew 2.2% to $18.6 million in the quarter. Sales at the segment grew 9.6% internationally on a year-over-year basis.

Sports Med & Other: Sales at the segment rose 5.6% to $5.3 million from the year-ago quarter. The U.S. sports med & other segment sales declined 0.3% and increased 9.5% internationally in the third quarter.

Guidance

Wright Medical expects net sales for full-year 2017 in the band of $740 million to $745 million. This includes negative impact from foreign currency exchange of approximately 1%. The company forecasts full-year 2017 adjusted EBITDA from continuing operations in the range of $84 million to $88 million.

Our Take

Wright Medical is striving toward product innovation through research and development. The company recently launched INVISION Total Ankle Revision System. This is the first system developed for total ankle revision arthroplasty. Per management, PERFORM Reversed launch will boost revenues after the company delivers additional instrument sets to the U.S. market. However, decrease in Lower extremities and Upper extremities sales, internationally, is a matter of concern.

Zacks Rank & Key Picks

Wright Medical currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are PetMed Express, Inc. (PETS - Free Report) , Luminex Corporation and Intuitive Surgical, Inc. (ISRG - Free Report) . Notably, PetMed and Luminex sport a Zacks Rank #1 (Strong Buy), while Intuitive Surgical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PetMed reported earnings per share of 43 cents for the second quarter of fiscal 2018, up 79.2% from the year-ago quarter’s 24 cents. Also, gross margin expanded 548 basis points year over year to 35.2% in the reported quarter.

Luminex reported adjusted earnings per share of 19 cents in the third quarter of 2017, up 216.7% year over year. The company’s revenues in the quarter increased almost 4.1% year over year to $74.1 million.

Intuitive Surgical posted adjusted earnings of $2.77 per share in the third quarter of 2017, up 34.5% on a year-over-year basis. Also, revenues increased 18% year over year to $806.1 million.

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