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Wright Medical (WMGI) Beats on Q1 Earnings, Keeps Guidance
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Wright Medical Group N.V. reported first-quarter 2018 adjusted loss of a penny, significantly narrower than the Zacks Consensus Estimate of a loss of 7 cents. Notably, loss per share in the year-ago quarter was 9 cents.
First-quarter revenues came in at $198.5 million, which beat the Zacks Consensus Estimate by 2.6%. Revenues also improved 9.2% at constant currency (cc). Per management, it represents an estimated 250 basis points (bps) increase from the year-ago quarter.
In the past three months, shares of Wright Medical have gained 4.7% against the industry’s decline of 13.4%.
Wright Medical carries a Zacks Rank #3 (Hold).
Wright Medical Group N.V. Price, Consensus and EPS Surprise
This segment posted worldwide revenues of $72.2 million, up 4.4% year over year.
Sales in the United States totaled $56.8 million, while international sales came in at $15.3 million.
Per management, the U.S. lower extremity business witnessed an improvement of 2.5% after two straight years of flat sales. The upside can be attributed to 14% growth in total ankle and a return to growth in the core lower extremity business.
Furthermore, there has been continued progress in ORTHOLOC ankle and small bone fracture product launches.
Upper Extremities
Revenues in this segment totaled $92.2 million, up 24.1% from the prior-year quarter.
In the United States, sales totaled $67.7 million, while internationally, the segment raked in revenues worth $29.6 million.
Per management, growth was driven by 23.5% growth in the company’s U.S. shoulder business. The quarter also saw strong contribution from flagship products like SIMPLICITI shoulder and PERFORM Reversed Glenoid.
Management is positive about the BLUEPRINT acquisition, which is anticipated to drive growth in the shoulder line of products till 2019.
Biologics
Worldwide Biologics sales were $23.4 million, down 1.6% from a year ago. While international revenues of the segment rose to $5.3 million, U.S. sales dropped to $18.2 million.
Sports Med & Other
This segment posted worldwide sales of $5.7 million, down 3.2% on a year-over-year basis. However, the segment’s U.S. sales shot up to $2.1 million, while international sales sunk to $3.6 million.
Margins
In the quarter under review, gross margin was 79.7%, up 30 bps from the year-earlier quarter.
Operating expenses, however, rose 5.8% to $158.3 million on increased SG&A (selling, general and administrative) and R&D (research and development) expenses.
EBITDA margin expansion was 310 bps, which paves the way for improvement through 2018.
Balance Sheet Details
Wright Medical exited the first quarter of 2018 with cash and cash equivalents of $138.1 million.
Guidance
Wright Medical reiterated its revenue guidance at the band of $800-$812 million, representing growth of 9-11% at cc. For 2018, the Zacks Consensus Estimate for revenues is pegged at $808.4 million, within the given range.
The company expects 2018 adjusted loss per share within 16-23 cents. The Zacks Consensus Estimate for the same is pinned at 18 cents, which again is within the projected range.
Full-year adjusted EBITDA is anticipated in the range of $104-$111 million.
Our Viewpoint
Wright Medical exited the first quarter on a promising note. While the year-over-year loss has narrowed, revenues have ticked up. Solid performance by the upper and lower extremities segments buoy optimism. International sales in these segments were high, which is a major positive. The acquisition of BLUEPRINT has also proven beneficial. Consistent innovation is likely to broaden the company’s product portfolio. Moreover, improvement in gross margin is noteworthy.
On the flip side, rising operating expenses is a concern. Declining sales in the Biologics and sports businesses are discouraging. Distribution issues in Europe and Asia and foreign currency volatility add to the woes.
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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Wright Medical (WMGI) Beats on Q1 Earnings, Keeps Guidance
Wright Medical Group N.V. reported first-quarter 2018 adjusted loss of a penny, significantly narrower than the Zacks Consensus Estimate of a loss of 7 cents. Notably, loss per share in the year-ago quarter was 9 cents.
First-quarter revenues came in at $198.5 million, which beat the Zacks Consensus Estimate by 2.6%. Revenues also improved 9.2% at constant currency (cc). Per management, it represents an estimated 250 basis points (bps) increase from the year-ago quarter.
In the past three months, shares of Wright Medical have gained 4.7% against the industry’s decline of 13.4%.
Wright Medical carries a Zacks Rank #3 (Hold).
Wright Medical Group N.V. Price, Consensus and EPS Surprise
Wright Medical Group N.V. Price, Consensus and EPS Surprise | Wright Medical Group N.V. Quote
Segment Details
Lower Extremities
This segment posted worldwide revenues of $72.2 million, up 4.4% year over year.
Sales in the United States totaled $56.8 million, while international sales came in at $15.3 million.
Per management, the U.S. lower extremity business witnessed an improvement of 2.5% after two straight years of flat sales. The upside can be attributed to 14% growth in total ankle and a return to growth in the core lower extremity business.
Furthermore, there has been continued progress in ORTHOLOC ankle and small bone fracture product launches.
Upper Extremities
Revenues in this segment totaled $92.2 million, up 24.1% from the prior-year quarter.
In the United States, sales totaled $67.7 million, while internationally, the segment raked in revenues worth $29.6 million.
Per management, growth was driven by 23.5% growth in the company’s U.S. shoulder business. The quarter also saw strong contribution from flagship products like SIMPLICITI shoulder and PERFORM Reversed Glenoid.
Management is positive about the BLUEPRINT acquisition, which is anticipated to drive growth in the shoulder line of products till 2019.
Biologics
Worldwide Biologics sales were $23.4 million, down 1.6% from a year ago. While international revenues of the segment rose to $5.3 million, U.S. sales dropped to $18.2 million.
Sports Med & Other
This segment posted worldwide sales of $5.7 million, down 3.2% on a year-over-year basis. However, the segment’s U.S. sales shot up to $2.1 million, while international sales sunk to $3.6 million.
Margins
In the quarter under review, gross margin was 79.7%, up 30 bps from the year-earlier quarter.
Operating expenses, however, rose 5.8% to $158.3 million on increased SG&A (selling, general and administrative) and R&D (research and development) expenses.
EBITDA margin expansion was 310 bps, which paves the way for improvement through 2018.
Balance Sheet Details
Wright Medical exited the first quarter of 2018 with cash and cash equivalents of $138.1 million.
Guidance
Wright Medical reiterated its revenue guidance at the band of $800-$812 million, representing growth of 9-11% at cc. For 2018, the Zacks Consensus Estimate for revenues is pegged at $808.4 million, within the given range.
The company expects 2018 adjusted loss per share within 16-23 cents. The Zacks Consensus Estimate for the same is pinned at 18 cents, which again is within the projected range.
Full-year adjusted EBITDA is anticipated in the range of $104-$111 million.
Our Viewpoint
Wright Medical exited the first quarter on a promising note. While the year-over-year loss has narrowed, revenues have ticked up. Solid performance by the upper and lower extremities segments buoy optimism. International sales in these segments were high, which is a major positive. The acquisition of BLUEPRINT has also proven beneficial. Consistent innovation is likely to broaden the company’s product portfolio. Moreover, improvement in gross margin is noteworthy.
On the flip side, rising operating expenses is a concern. Declining sales in the Biologics and sports businesses are discouraging. Distribution issues in Europe and Asia and foreign currency volatility add to the woes.
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.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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