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Integer Holdings Corporation (ITGR - Free Report) posted first-quarter adjusted earnings per share of 61 cents per share, missing the Zacks Consensus Estimate by 14.1%. However, earnings rose 48.8% year over year.
Revenues totaled $382 million, beating the Zacks Consensus Estimate by 4%. Revenues also increased 10.5% on a year-over-year basis and 8.8% organically.
Shares of Integer Holdings have rallied 56.6% against the industry’s decline of 5.1% in a year’s time.
Integer Holdings currently carries a Zacks Rank #3 (Hold).
Integer Holdings Corporation Price, Consensus and EPS Surprise
This segment continued to see strong top-line growth. Revenues came in at $138.3 million, up 10.3% year over year and 9.4% organically. The upside was driven by continued strong demand for Integer-owned products and rising demand for contract manufacturing components.
Advanced Surgical, Orthopedics & Portable Medical
In the quarter under review, this segment posted revenues of $121.8 million, up 15.8% from the prior-year quarter and 11.5% organically. Per management, the growth is driven by increases in Portable Medical products, spinal implants, continued ramping up of new products as well as accelerating sales from one customer as part of an inventory build program.
Notably, Integer Holdings has planned a divestiture of the segment’s product lines for $600 million to MedPlast, LLC.
Cardiac & Neuromodulation
This segment raked in revenues worth $108.9 million, up 4.9% from the year-ago quarter and 4.9% organically. Per management, the neuromodulation market remains a key driver of long-term growth for the product line.
Total Non-Medical sales accounted for $12.7 million, up 12% both on an organic and year-over-year basis.
Margins
Gross profit in the quarter came in at $95.8 million, up 5% year over year. Gross margin was 25.1%, down 130 basis points (bps).
The company’s operating income totaled $34.7 million, up 30.8% on a year-over-year basis. Operating margin is 9.1%, up 140 bps. The upside can be attributed to the company’s 5.6% reduction in operating expenses, which totaled $61.1 million.
Adjusted EBITDA increased 7% to $69 million.
Financial Condition
Integer Holdings exited the quarter with cash flow of $46 million from operations. This translated to $36 million of free cash flow.
Notably, in the reported quarter, the company paid down $50 million of debt.
Guidance
Buoyed by a stellar first quarter, Integer Holdings has posted an impressive guidance.
The company expects adjusted earnings per share within $3.20-3.20, reflecting growth of 14-25%. Notably, the Zacks Consensus Estimate is pegged at $3.30, within the range.
Revenues are anticipated between $1.51 billion and $1.55 billion, indicating growth of 3-6%. The Zacks Consensus Estimate is pinned at $1.52 billion, which is within the given range.
The company expects cash flow from operations of $160 million and free cash flow of $110 million. The company further expects to pay down $115 million of debt in 2018.
For adjusted EBITDA, the company has raised the expected range to $310-320 million, up 9-12% approximately.
Full-year adjusted effective tax rate is expected at around 21-24%.
In Conclusion
Integer Holdings had a strong start to 2018 on high organic and year-over-year growth in earnings and revenues. The Cardio & Vascular arm deserves a special mention here. The strategic divestment of the Advanced Surgical, Orthopedics & Portable Medical wing to MedPlast, LLC is expected to prove accretive in the quarters ahead. The company also has a multi-year plan for long-term developments. A raised guidance, contracting operating expenses and the clearing of debt are other major positives. However, the recent loss of some major customers and intense competition in the niche space might raise concerns.
Key Picks
A few better-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Integer Holdings (ITGR) Q1 Earnings Miss, View Impressive
Integer Holdings Corporation (ITGR - Free Report) posted first-quarter adjusted earnings per share of 61 cents per share, missing the Zacks Consensus Estimate by 14.1%. However, earnings rose 48.8% year over year.
Revenues totaled $382 million, beating the Zacks Consensus Estimate by 4%. Revenues also increased 10.5% on a year-over-year basis and 8.8% organically.
Shares of Integer Holdings have rallied 56.6% against the industry’s decline of 5.1% in a year’s time.
Integer Holdings currently carries a Zacks Rank #3 (Hold).
Integer Holdings Corporation Price, Consensus and EPS Surprise
Integer Holdings Corporation Price, Consensus and EPS Surprise | Integer Holdings Corporation Quote
Segment Details
Cardio & Vascular
This segment continued to see strong top-line growth. Revenues came in at $138.3 million, up 10.3% year over year and 9.4% organically. The upside was driven by continued strong demand for Integer-owned products and rising demand for contract manufacturing components.
Advanced Surgical, Orthopedics & Portable Medical
In the quarter under review, this segment posted revenues of $121.8 million, up 15.8% from the prior-year quarter and 11.5% organically. Per management, the growth is driven by increases in Portable Medical products, spinal implants, continued ramping up of new products as well as accelerating sales from one customer as part of an inventory build program.
Notably, Integer Holdings has planned a divestiture of the segment’s product lines for $600 million to MedPlast, LLC.
Cardiac & Neuromodulation
This segment raked in revenues worth $108.9 million, up 4.9% from the year-ago quarter and 4.9% organically. Per management, the neuromodulation market remains a key driver of long-term growth for the product line.
Total Non-Medical sales accounted for $12.7 million, up 12% both on an organic and year-over-year basis.
Margins
Gross profit in the quarter came in at $95.8 million, up 5% year over year. Gross margin was 25.1%, down 130 basis points (bps).
The company’s operating income totaled $34.7 million, up 30.8% on a year-over-year basis. Operating margin is 9.1%, up 140 bps. The upside can be attributed to the company’s 5.6% reduction in operating expenses, which totaled $61.1 million.
Adjusted EBITDA increased 7% to $69 million.
Financial Condition
Integer Holdings exited the quarter with cash flow of $46 million from operations. This translated to $36 million of free cash flow.
Notably, in the reported quarter, the company paid down $50 million of debt.
Guidance
Buoyed by a stellar first quarter, Integer Holdings has posted an impressive guidance.
The company expects adjusted earnings per share within $3.20-3.20, reflecting growth of 14-25%. Notably, the Zacks Consensus Estimate is pegged at $3.30, within the range.
Revenues are anticipated between $1.51 billion and $1.55 billion, indicating growth of 3-6%. The Zacks Consensus Estimate is pinned at $1.52 billion, which is within the given range.
The company expects cash flow from operations of $160 million and free cash flow of $110 million. The company further expects to pay down $115 million of debt in 2018.
For adjusted EBITDA, the company has raised the expected range to $310-320 million, up 9-12% approximately.
Full-year adjusted effective tax rate is expected at around 21-24%.
In Conclusion
Integer Holdings had a strong start to 2018 on high organic and year-over-year growth in earnings and revenues. The Cardio & Vascular arm deserves a special mention here. The strategic divestment of the Advanced Surgical, Orthopedics & Portable Medical wing to MedPlast, LLC is expected to prove accretive in the quarters ahead. The company also has a multi-year plan for long-term developments. A raised guidance, contracting operating expenses and the clearing of debt are other major positives. However, the recent loss of some major customers and intense competition in the niche space might raise concerns.
Key Picks
A few better-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>