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Merit Medical (MMSI) Beats on Q2 Earnings, Raises Guidance
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Merit Medical Systems, Inc. (MMSI - Free Report) recently reported second-quarter 2018 adjusted earnings per share (EPS) of 43 cents, beating the Zacks Consensus Estimate by 7.5%. EPS also improved 19.4% from the year-ago quarter’s tally.
The Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $224.8 million, up 20.5% from a year ago. Revenues surpassed the Zacks Consensus Estimate by 4.9%. On a constant currency (cc) basis, revenues grossed $221.2 million, up 18.6%. Per management, organic growth was 9.8% at cc.
Meanwhile, shares of Merit Medical have rallied 46.6%, compared with the industry’s rise of 5.7% in a year’s time.
The stock carries a Zacks Rank #4 (Sell).
Merit Medical Systems, Inc. Price, Consensus and EPS Surprise
The company reports revenues through two segments — the Cardiovascular unit and the Endoscopydivision.
The Cardiovascular unit recorded revenues of $216.4 million, up 20.4% year over year. The upside can be attributed to a 30.2% year-over-year increase in the segment’s stand-alone devices to $92.5 million. Moreover, revenues from catheters increased 21.4% to $39.4 million.
Revenues at the Endoscopy Division totaled $8.42 million, up 22.3% year over year.
Margins
In the quarter under review, gross profit totaled $100 million, up 18.9% on a year-over-year basis.
Per management, adjusted gross margin came in at 48.9%, up 60 basis points (bps). Per management, the improvement was backed by higher production variances and better product mix.
Operating income was $15 million, which improved 13.1% from the prior-year quarter. Operating margin was down 6.7% and contracted 40 bps. Operating expenses shot up to $84.9 million from $70.8 million in the year-ago quarter.
Guidance Raised
Buoyed by a solid second-quarter performance, Merit Medical lifted its 2018 guidance.
The company expects 2018 revenues in the band of $870-$880 million, higher than the prior guidance of $838-$851 million. The Zacks Consensus Estimate for revenues is pegged at $846.8 million, below the guided range.
Adjusted earnings per share are expected between $1.60 and $1.70, up from the previous range of $1.57-$1.69. The Zacks Consensus Estimate for the same is pinned at $1.65, within the projected range.
The company expects adjusted gross margins within 48.9-49.4%.
In Conclusion
Merit Medical exited the second quarter on a solid note, with earnings and revenues beating the consensus mark. Solid growth in the Cardiovascular segment is a positive apart from expansion in gross margin. Solid international growth buoys optimism. Management is optimistic about the alliance with NinePoint Medical which is already contributing to growth. The recent acquisition of product distribution agreements for the DirectACCESS Medical PTA Balloon Catheter is encouraging as well. The company also became the exclusive worldwide distributor for the Q50 PLUS Stent Graft Balloon. An upbeat guidance for 2018 paints a bright picture as well.
However, contracting operating margins and surging operating expenses raise concern. Headwinds like stiff competition and higher consolidation in the healthcare industry add to the woes.
Key Picks
A few better-ranked stocks in the broader medical space are Align Technology, Inc (ALGN - Free Report) , Integer Holdings Corp (ITGR - Free Report) and Masimo Corporation (MASI - Free Report) .
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted EPS is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is pinned at $381.8 million. The stock sports a Zacks Rank #1.
Masimo is scheduled to release its second-quarter 2018 results on Aug 1. The Zacks Consensus Estimate for adjusted EPS stands at 72 cents, while the same for revenues is pinned at $208 million. The stock carries Zacks Rank #2 (Buy).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Merit Medical (MMSI) Beats on Q2 Earnings, Raises Guidance
Merit Medical Systems, Inc. (MMSI - Free Report) recently reported second-quarter 2018 adjusted earnings per share (EPS) of 43 cents, beating the Zacks Consensus Estimate by 7.5%. EPS also improved 19.4% from the year-ago quarter’s tally.
The Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $224.8 million, up 20.5% from a year ago. Revenues surpassed the Zacks Consensus Estimate by 4.9%. On a constant currency (cc) basis, revenues grossed $221.2 million, up 18.6%. Per management, organic growth was 9.8% at cc.
Meanwhile, shares of Merit Medical have rallied 46.6%, compared with the industry’s rise of 5.7% in a year’s time.
The stock carries a Zacks Rank #4 (Sell).
Merit Medical Systems, Inc. Price, Consensus and EPS Surprise
Merit Medical Systems, Inc. Price, Consensus and EPS Surprise | Merit Medical Systems, Inc. Quote
Segment Details
The company reports revenues through two segments — the Cardiovascular unit and the Endoscopy division.
The Cardiovascular unit recorded revenues of $216.4 million, up 20.4% year over year. The upside can be attributed to a 30.2% year-over-year increase in the segment’s stand-alone devices to $92.5 million. Moreover, revenues from catheters increased 21.4% to $39.4 million.
Revenues at the Endoscopy Division totaled $8.42 million, up 22.3% year over year.
Margins
In the quarter under review, gross profit totaled $100 million, up 18.9% on a year-over-year basis.
Per management, adjusted gross margin came in at 48.9%, up 60 basis points (bps). Per management, the improvement was backed by higher production variances and better product mix.
Operating income was $15 million, which improved 13.1% from the prior-year quarter. Operating margin was down 6.7% and contracted 40 bps. Operating expenses shot up to $84.9 million from $70.8 million in the year-ago quarter.
Guidance Raised
Buoyed by a solid second-quarter performance, Merit Medical lifted its 2018 guidance.
The company expects 2018 revenues in the band of $870-$880 million, higher than the prior guidance of $838-$851 million. The Zacks Consensus Estimate for revenues is pegged at $846.8 million, below the guided range.
Adjusted earnings per share are expected between $1.60 and $1.70, up from the previous range of $1.57-$1.69. The Zacks Consensus Estimate for the same is pinned at $1.65, within the projected range.
The company expects adjusted gross margins within 48.9-49.4%.
In Conclusion
Merit Medical exited the second quarter on a solid note, with earnings and revenues beating the consensus mark. Solid growth in the Cardiovascular segment is a positive apart from expansion in gross margin. Solid international growth buoys optimism. Management is optimistic about the alliance with NinePoint Medical which is already contributing to growth. The recent acquisition of product distribution agreements for the DirectACCESS Medical PTA Balloon Catheter is encouraging as well. The company also became the exclusive worldwide distributor for the Q50 PLUS Stent Graft Balloon. An upbeat guidance for 2018 paints a bright picture as well.
However, contracting operating margins and surging operating expenses raise concern. Headwinds like stiff competition and higher consolidation in the healthcare industry add to the woes.
Key Picks
A few better-ranked stocks in the broader medical space are Align Technology, Inc (ALGN - Free Report) , Integer Holdings Corp (ITGR - Free Report) and Masimo Corporation (MASI - Free Report) .
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for adjusted EPS is $1.09 and the same for revenues is $469.2 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for adjusted bottom line is 90 cents and the same for the top line is pinned at $381.8 million. The stock sports a Zacks Rank #1.
Masimo is scheduled to release its second-quarter 2018 results on Aug 1. The Zacks Consensus Estimate for adjusted EPS stands at 72 cents, while the same for revenues is pinned at $208 million. The stock carries Zacks Rank #2 (Buy).
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>