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Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 60 cents in the second quarter of 2018, up 33.3% from the year-ago figure. Adjusted EPS remained in line with the Zacks Consensus Estimate.
Revenue Discussion
Total revenues in the reported quarter increased 29.8% year over year to $366.2 million, lagging the Zacks Consensus Estimate of $368 million. Excluding revenues from Codman acquisitions, divestitures and the effect of currency exchange rates, organic revenues rose 3.4% year over year.
Apart from high organic revenues, successful progress with the company’s Codman integration and a continued progress with the channel expansion strategy within Orthopedics and Tissue Technologies strongly contributed to the company’s second-quarter performance.
Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise
Coming to product categories, revenues from the company's Codman Specialty Surgical segment surged 49.8% to $239.5 million. Growth came primarily on the back of stronger than expected sales in Advanced Energy franchise.
Orthopedics and Tissue Technologies revenues came in at $126.7 million in the second quarter, up 3.6% year over year. This upside is fueled by 6% organic growth excluding the private label business.
Margin Trend
Gross margin contracted 248 basis points (bps) to 62.4% in the reported quarter despite a 24.8% rise in gross profit to $228.6 million. Selling, general and administrative expenses increased 21.8% to $176.6 million in the quarter under review while research and development expenses rose 21.3% to $19.1 million. However, adjusted operating margin saw a 105-bps expansion to 8.9% in the second quarter.
Financial Position
Integra LifeSciences exited second-quarter 2018 with cash and cash equivalents of $183.8 million, down from $189.4 million recorded at the end of the first quarter. Net cash flow from operating activities at the end of the second quarter was $77.7 million, up from $57.7 million in the year-ago period.
2018 Outlook
The company has raised the lower end of its full-year revenue guidance by $5 million to a new range of $1.475-$1.49 billion. The Zacks Consensus Estimate for 2018 revenues of $1.49 billion coincides with the upper end of the guided range. However, the company reiterates its full-year outlook for organic sales of approximately 5.0%.
Adjusted earnings per share for 2018 have been tapered to $2.36-$2.42 from the previous projection of $2.34-$2.42. The Zacks Consensus Estimate for 2018 adjusted earnings is pegged at $2.41, lower than the company’s guided range.
Our Take
Integra LifeSciences exited the second quarter of 2018 on a dull note with in-line earnings and revenues missing the Zacks Consensus Estimate. However, a strong year-over-year rise in revenues on the back of the company’s recent acquired business buoys optimism.
We are also encouraged by the company’s balanced segmental year-over-year revenue growth in the second quarter. Integra LifeSciences’ successful progress with its channel expansion strategy and Codman integration raise hope. Notably, last December, the company announced plans within Orthopedics and Tissue Technologies segment to expand its sales channel, improve focus and competitiveness plus better align the company’s product portfolio with clinical customers.
We believe, the company is trying to execute its growth plan through an efficient management team. Moreover, higher year-over-year investments in research and development are encouraging. The company’s promising view also instills confidence in the stock.
However, significant gross margin contractions caused by escalating costs are concerns.
Zacks Rank & Key Picks
Integra LifeSciences has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical space are Insulet Corporation (PODD - Free Report) , Amedisys, Inc. (AMED - Free Report) and Illumina, Inc. (ILMN - Free Report) .
Insulet is expected to release second-quarter fiscal 2018 results on Aug 2. The Zacks Consensus Estimate for the quarterly loss per share is pegged at 13 cents and for revenues at $132.9 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Amedisys is expected to release second-quarter 2018 results on Jul 31. The Zacks Consensus Estimate for adjusted EPS stands at 78 cents and for the top line at $403.6 million. The stock carries a Zacks Rank of 1.
Illumina is slated to release second-quarter 2018 results on Jul 30. The Zacks Consensus Estimate for bottom line per share is pegged at $1.11 and for revenues at $787.7 million. The company is a Zacks #1 Ranked player.
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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Integra (IART) Reports In-Line Q2 Earnings, Tapers View
Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 60 cents in the second quarter of 2018, up 33.3% from the year-ago figure. Adjusted EPS remained in line with the Zacks Consensus Estimate.
Revenue Discussion
Total revenues in the reported quarter increased 29.8% year over year to $366.2 million, lagging the Zacks Consensus Estimate of $368 million. Excluding revenues from Codman acquisitions, divestitures and the effect of currency exchange rates, organic revenues rose 3.4% year over year.
Apart from high organic revenues, successful progress with the company’s Codman integration and a continued progress with the channel expansion strategy within Orthopedics and Tissue Technologies strongly contributed to the company’s second-quarter performance.
Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise
Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise | Integra LifeSciences Holdings Corporation Quote
Coming to product categories, revenues from the company's Codman Specialty Surgical segment surged 49.8% to $239.5 million. Growth came primarily on the back of stronger than expected sales in Advanced Energy franchise.
Orthopedics and Tissue Technologies revenues came in at $126.7 million in the second quarter, up 3.6% year over year. This upside is fueled by 6% organic growth excluding the private label business.
Margin Trend
Gross margin contracted 248 basis points (bps) to 62.4% in the reported quarter despite a 24.8% rise in gross profit to $228.6 million. Selling, general and administrative expenses increased 21.8% to $176.6 million in the quarter under review while research and development expenses rose 21.3% to $19.1 million. However, adjusted operating margin saw a 105-bps expansion to 8.9% in the second quarter.
Financial Position
Integra LifeSciences exited second-quarter 2018 with cash and cash equivalents of $183.8 million, down from $189.4 million recorded at the end of the first quarter. Net cash flow from operating activities at the end of the second quarter was $77.7 million, up from $57.7 million in the year-ago period.
2018 Outlook
The company has raised the lower end of its full-year revenue guidance by $5 million to a new range of $1.475-$1.49 billion. The Zacks Consensus Estimate for 2018 revenues of $1.49 billion coincides with the upper end of the guided range. However, the company reiterates its full-year outlook for organic sales of approximately 5.0%.
Adjusted earnings per share for 2018 have been tapered to $2.36-$2.42 from the previous projection of $2.34-$2.42. The Zacks Consensus Estimate for 2018 adjusted earnings is pegged at $2.41, lower than the company’s guided range.
Our Take
Integra LifeSciences exited the second quarter of 2018 on a dull note with in-line earnings and revenues missing the Zacks Consensus Estimate. However, a strong year-over-year rise in revenues on the back of the company’s recent acquired business buoys optimism.
We are also encouraged by the company’s balanced segmental year-over-year revenue growth in the second quarter. Integra LifeSciences’ successful progress with its channel expansion strategy and Codman integration raise hope. Notably, last December, the company announced plans within Orthopedics and Tissue Technologies segment to expand its sales channel, improve focus and competitiveness plus better align the company’s product portfolio with clinical customers.
We believe, the company is trying to execute its growth plan through an efficient management team. Moreover, higher year-over-year investments in research and development are encouraging. The company’s promising view also instills confidence in the stock.
However, significant gross margin contractions caused by escalating costs are concerns.
Zacks Rank & Key Picks
Integra LifeSciences has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical space are Insulet Corporation (PODD - Free Report) , Amedisys, Inc. (AMED - Free Report) and Illumina, Inc. (ILMN - Free Report) .
Insulet is expected to release second-quarter fiscal 2018 results on Aug 2. The Zacks Consensus Estimate for the quarterly loss per share is pegged at 13 cents and for revenues at $132.9 million. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Amedisys is expected to release second-quarter 2018 results on Jul 31. The Zacks Consensus Estimate for adjusted EPS stands at 78 cents and for the top line at $403.6 million. The stock carries a Zacks Rank of 1.
Illumina is slated to release second-quarter 2018 results on Jul 30. The Zacks Consensus Estimate for bottom line per share is pegged at $1.11 and for revenues at $787.7 million. The company is a Zacks #1 Ranked player.
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 >>