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Integer Holdings (ITGR) Beats on Q4 Earnings, Issues '18 View
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Integer Holdings Corporation (ITGR - Free Report) reported adjusted earnings of 96 cents per share in the fourth quarter of 2017, compared with 87 cents in the year-ago quarter. Further, earnings beat the Zacks Consensus Estimate of 80 cents.
Revenues rose 8.6% year over year to $390.5 million on a reported basis and exceeded the Zacks Consensus Estimate of $361 million. Notably, revenues improved 7.6% on an organic basis.
Sales grew on a reported and organic basis, courtesy of solid performances by the company’s Cardio and Vascular business.
Integer Holdings operates through two segments — Medical Sales and Non-Medical Sales.
Medical Sales
Sales in the segment were $375.7 million, up 7.9% year over year. Revenues increased 6.9% on an organic basis. Total Medical Sales has three subsegments — Advanced Surgical, Orthopedics and Portable Medical; Cardio and Vascular; and Cardiac/Neuromodulation.
Advanced Surgical, Orthopedics, and Portable Medical
Revenues amounted to $118.5 million, up 11% from the prior-year quarter on a reported basis.
On a comparable organic constant currency basis, Advanced Surgical, Orthopedics & Portable Medical revenues rose 8.8% year over year. This was primarily driven by stable performance in Portable Medical space and new launches under the orthopedics and arthroscopic platforms.
Cardio and Vascular
Revenues in the segment totaled $140.5 million, up 11.9% from the prior-year quarter. This came on the back of strong demand for existing OEM product lines and contract components.
On a comparable organic constant-currency basis, revenues improved 11.1% over the prior year. The figure was primarily driven by higher customer demand for electrophysiology and vascular access products.
Cardiac/Neuromodulation
Revenues in this segment totaled $116.7 million, rising 0.7% from the prior-year quarter. On a comparable organic constant-currency basis, Cardiac & Neuromodulation revenues increased 0.7%.
Relentless focus on customer relationships, numerous value-added services and opportunities for economic efficiencies are expected to drive sales in the segment. In fact, the company is well positioned to optimize total cost of ownership and supply chain control at this segment.
Non-Medical Sales
Sales in the segment totaled $14.8 million, up 30.3% year over year on reported and organic basis.
Margin Analysis
Integer Holdings generated gross profit of $104.8 million in the fourth quarter, up 12.8% year over year. As a percentage of revenues, gross margin in fourth quarter expanded 100 basis points (bps) to 26.8%.
Total operating income in the fourth quarter was $34.5million, up 11.3% year over year. As a percentage of revenues, operating margin in fourth quarter expanded 20 bps to 26.8%.
2017 at a Glance
In 2017, Integer Holdings registered revenues of $1,461.9 million, improving 5.4% on a reported basis and 5.3% on an organic basis year over year.
Total Medical Sales in the quarter were $1404 million (96.1% of net revenues), while Non-medical Sales were almost $57 million (3.9% of net revenues).
Guidance
Integer Holdings expects revenues in the range of $1490-$1530 million on an adjusted comparable basis for 2018. This reflects a year-over-year growth of 2-5%. The Zacks Consensus Estimate for revenues is currently pegged at $1470 million.
Adjusted earnings are projected in the range of $3.15-$3.45 per share. This reflects year-over-year growth of 12-23%. The Zacks Consensus Estimate for 2018 adjusted earnings is currently pegged at $3.06.
Bottom Line
Integer Holdings ended the fourth quarter on a solid note, with strong performance in its Medical and Non-Medical units.
However, Cardiac & Neuromodulation remained flat year over year. Integer Holdings’ Cardiac Rhythm Management unit has been sluggish. Also, revenue headwinds are a concern, thanks to private insurance rate reductions, higher provisions for rental revenue adjustments and lower net patient additions. Owing to continued reimbursement declines, the company expects rental revenue per patient to fall in the upcoming quarters.
Of the major positives, the company provided a positive guidance for full-year 2018. The company’s steadfast focus on customer relationship, focus on cost reduction and burgeoning financial performance are key catalysts. Integer Holdings derives a significant portion of its revenues from Medicare’s service reimbursement programs.
Key Picks
A few better-ranked stocks in the broader medical sector are PerkinElmer , Bio-Rad Laboratories (BIO - Free Report) and Becton, Dickinson and Company (BDX - Free Report) .
PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).
Becton, Dickinson has a Zacks Rank #2. The company has a long-term expected earnings growth rate of 13.3%.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Integer Holdings (ITGR) Beats on Q4 Earnings, Issues '18 View
Integer Holdings Corporation (ITGR - Free Report) reported adjusted earnings of 96 cents per share in the fourth quarter of 2017, compared with 87 cents in the year-ago quarter. Further, earnings beat the Zacks Consensus Estimate of 80 cents.
Revenues rose 8.6% year over year to $390.5 million on a reported basis and exceeded the Zacks Consensus Estimate of $361 million. Notably, revenues improved 7.6% on an organic basis.
Sales grew on a reported and organic basis, courtesy of solid performances by the company’s Cardio and Vascular business.
The stock has a Zacks Rank #4 (Sell).
Integer Holdings Corporation Price and Consensus
Integer Holdings Corporation Price and Consensus | Integer Holdings Corporation Quote
Segmental Analysis
Integer Holdings operates through two segments — Medical Sales and Non-Medical Sales.
Medical Sales
Sales in the segment were $375.7 million, up 7.9% year over year. Revenues increased 6.9% on an organic basis. Total Medical Sales has three subsegments — Advanced Surgical, Orthopedics and Portable Medical; Cardio and Vascular; and Cardiac/Neuromodulation.
Advanced Surgical, Orthopedics, and Portable Medical
Revenues amounted to $118.5 million, up 11% from the prior-year quarter on a reported basis.
On a comparable organic constant currency basis, Advanced Surgical, Orthopedics & Portable Medical revenues rose 8.8% year over year. This was primarily driven by stable performance in Portable Medical space and new launches under the orthopedics and arthroscopic platforms.
Cardio and Vascular
Revenues in the segment totaled $140.5 million, up 11.9% from the prior-year quarter. This came on the back of strong demand for existing OEM product lines and contract components.
On a comparable organic constant-currency basis, revenues improved 11.1% over the prior year. The figure was primarily driven by higher customer demand for electrophysiology and vascular access products.
Cardiac/Neuromodulation
Revenues in this segment totaled $116.7 million, rising 0.7% from the prior-year quarter. On a comparable organic constant-currency basis, Cardiac & Neuromodulation revenues increased 0.7%.
Relentless focus on customer relationships, numerous value-added services and opportunities for economic efficiencies are expected to drive sales in the segment. In fact, the company is well positioned to optimize total cost of ownership and supply chain control at this segment.
Non-Medical Sales
Sales in the segment totaled $14.8 million, up 30.3% year over year on reported and organic basis.
Margin Analysis
Integer Holdings generated gross profit of $104.8 million in the fourth quarter, up 12.8% year over year. As a percentage of revenues, gross margin in fourth quarter expanded 100 basis points (bps) to 26.8%.
Total operating income in the fourth quarter was $34.5million, up 11.3% year over year. As a percentage of revenues, operating margin in fourth quarter expanded 20 bps to 26.8%.
2017 at a Glance
In 2017, Integer Holdings registered revenues of $1,461.9 million, improving 5.4% on a reported basis and 5.3% on an organic basis year over year.
Total Medical Sales in the quarter were $1404 million (96.1% of net revenues), while Non-medical Sales were almost $57 million (3.9% of net revenues).
Guidance
Integer Holdings expects revenues in the range of $1490-$1530 million on an adjusted comparable basis for 2018. This reflects a year-over-year growth of 2-5%. The Zacks Consensus Estimate for revenues is currently pegged at $1470 million.
Adjusted earnings are projected in the range of $3.15-$3.45 per share. This reflects year-over-year growth of 12-23%. The Zacks Consensus Estimate for 2018 adjusted earnings is currently pegged at $3.06.
Bottom Line
Integer Holdings ended the fourth quarter on a solid note, with strong performance in its Medical and Non-Medical units.
However, Cardiac & Neuromodulation remained flat year over year. Integer Holdings’ Cardiac Rhythm Management unit has been sluggish. Also, revenue headwinds are a concern, thanks to private insurance rate reductions, higher provisions for rental revenue adjustments and lower net patient additions. Owing to continued reimbursement declines, the company expects rental revenue per patient to fall in the upcoming quarters.
Of the major positives, the company provided a positive guidance for full-year 2018. The company’s steadfast focus on customer relationship, focus on cost reduction and burgeoning financial performance are key catalysts. Integer Holdings derives a significant portion of its revenues from Medicare’s service reimbursement programs.
Key Picks
A few better-ranked stocks in the broader medical sector are PerkinElmer , Bio-Rad Laboratories (BIO - Free Report) and Becton, Dickinson and Company (BDX - Free Report) .
Bio-Rad Laboratories has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 25%.
PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).
Becton, Dickinson has a Zacks Rank #2. The company has a long-term expected earnings growth rate of 13.3%.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>