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Merit Medical (MMSI) Tops Q3 Earnings & Revenue Estimates

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Merit Medical Systems, Inc. (MMSI - Free Report) recently reported third-quarter 2018 adjusted earnings per share (EPS) of 47 cents, beating the Zacks Consensus Estimate of 42 cents. EPS improved 46.9% from the year-ago quarter’s tally.

The Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $221.6 million, up 23.6% from the year-ago quarter’s tally. Revenues surpassed the Zacks Consensus Estimate of $218 million.

The stock carries a Zacks Rank #4 (Sell).

Segmental Analysis

The company reports revenues through two segments — the Cardiovascular unit and the Endoscopy division.

The Cardiovascular unit recorded revenues of $212.2 million, up 22.8% year over year. The upside can be attributed to a 32.3% year-over-year increase in the segment’s stand-alone devices to $91 million. Moreover, revenues from catheters increased 27.8% to $40.6 million. Inflation devices increased 14.3% year over year to $22.9 million.

Revenues in the Endoscopy division totaled $9.51 million, up 43.8% year over year.

Margins

In the quarter under review, gross profit totaled $102.1 million, up 26.7% on a year-over-year basis. Gross margin came in at 46% of net revenues, up 110 basis points (bps). Per management, the improvement was backed by higher production variances and better product mix.

The company registered selling, general and administrative expenses of $66.4 million, up 21.3% year over year.

The company registered research and development expenses of $14.5 million, up 13.1% year over year.

Net operating income in the quarter totaled $21.1 million.

Merit Medical Systems, Inc. Price and Consensus

 

Guidance Raised

Merit Medical reiterated2018 guidance.

The company expects 2018 revenues in the band of $870-$880 million. The Zacks Consensus Estimate for revenues is pegged at $874 million, within the guided range.

Adjusted EPS are expected between $1.60 and $1.70. The Zacks Consensus Estimate for the same is pinned at $1.64, within the projected range.

The company expects adjusted gross margins within 48.9-49.4%.

In Conclusion

Merit Medical exited the third quarter on a solid note, with earnings and revenues beating the consensus mark.

Solid growth in the Cardiovascular segment is a positive along with 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.

Recently, the company received FDA 510(k) clearance for a series of new tracheal/bronchial mini-stents.  The company also received 510(k) clearance for EmboCube product line.

However, surging operating expenses areconcerns. Headwinds like stiff competition and higher consolidation in the healthcare industry add to the woes.

Upcoming Releases From the MedTech Industry

A few better-ranked stocks in the MedTech space are Inogen, Inc (INGN - Free Report) , Baxter International Inc (BAX - Free Report) and Henry Schein, Inc (HSIC - Free Report) .

Inogen is expected to release third-quarter fiscal 2018 results on Nov 6. The Zacks Consensus Estimate is pegged at 52 cents for the quarter’s adjusted EPS and the same for revenues is pegged at $91.1. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Baxter is expected to release third-quarter 2018 results on Oct 31. The Zacks Consensus Estimate for the period’s adjusted EPS is 74 cents and the same for revenues is pegged at $2.79 billion. The stock carries a Zacks Rank #2.

Henry Schein is slated to release third-quarter 2018 results on Nov 6. The Zacks Consensus Estimate for adjusted EPS is $1.01for the to-be-reported quarter and the same for the top line is pegged at$3.36 billion. The stock carries a Zacks Rank #2.

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