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Surmodics' (SRDX) Q4 Earnings and Revenues Beat Estimates
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Surmodics, Inc. (SRDX - Free Report) reported adjusted earnings of 5 cents per share in fourth-quarter fiscal 2018, comparing favorably with the Zacks Consensus Estimate of a loss of a penny. Earnings however plummeted 72.2% on a year-over-year basis.
Revenues in the quarter increased 14.9% to $23 million, which beat the Zacks Consensus Estimate by 2.2%.
Over the past year, the Zacks Rank #3 (Hold) stock has skyrocketed 119.5% compared with the industry’s 4% rise. The current level is also higher than the S&P 500 index’s increase of 7.5%.
FY18 at a Glance
Adjusted earnings per share on a full-year basis were 49 cents, also down 3.9% from fiscal 2017.
Fiscal 2018 revenues totaled $81.3 million, up 11.2% from fiscal 2017.
On a full-year basis, Medical Device revenues (74.4% of net revenues) grossed $60.5 million, up 12.1% from fiscal 2017. Surmodics IVD segment (25.6% of net revenues) raked in $20.8 million, up 8.9% from a year ago.
Notably, Product sales in the quarter were $10.7 million, up 21.3% year over year. Per management, the uptick can be attributed to a substantial increase in balloon catheter unit volume as a result of recent customer product launches.
Royalty and license fee revenues totaled $10.3 million, up 11.9% from the year-ago quarter.
Research, development and other revenues were $2 million, up 0.1% year over year.
Segmental Analysis
Surmodics reports revenues under two segments — Medical Device and In Vitro Diagnostics (IVD).
Medical Device
In the reported quarter, sales rose 15.4% to $17 million. Per management, this includes $2.2 million from Surmodics’ SurVeil agreement with Abbott Laboratories (ABT - Free Report) .
However, the Medical Device business unit reported $2.1 million of operating loss in the fourth quarter.
IVD
In the quarter under review, sales increased 13.4% to $6.1 million. Per management, the segment saw strong growth in antigen and DNA slide sales in the quarter.
Operating income in the segment was $2.4 million in the reported quarter, marginally down from the year-ago quarter’s level.
Operating Details
Surmodics registered Product costs of $4.1 million in the quarter, up 23.3% year over year.
The company had Research and development costs of $9.8 million, up 23.4%.
Selling, general and administrative expenditures were almost $12.6 million, up 29.6%.
Total operating costs and expenses in the quarter were $6.5 million, up 22.6%.
Total operating costs and expenses in the reported quarter were $25.5 million, up 29.7%.
Guidance
Surmodics expects fiscal 2019 revenues between $92 million and $97 million. The Zacks Consensus Estimate is pegged at $92.9 million, within the guided range.
Surmodics expects a loss of 7 cents per share to earnings of 23 cents per share for fiscal 2019. The Zacks Consensus Estimate for earnings per share is pinned at 3 cents, within the projected range.
Management expects Medical Device unit to contribute significantly to double-digit revenue growth in fiscal 2019.
Wrapping Up
Surmodics exited the fiscal 2018 on a solid note, with earnings and revenues topping estimates. The company continues to gain from its core Medical Device and IVD units. In fact, management expects notable contributions from them in fiscal 2019. Management also remains optimistic about agreement with MedTech behemoth Abbott for commercialization of its SurVeil drug-coated balloon. Surmodics also expects to complete the TRANSCEND clinical study enrollment by fiscal 2019.
On the flip side, significant year-over-year decline in Surmodics’ earnings per share is worrisome. Surging operating expenses and operating losses in the Medical Device unit are likely to keep margins under pressure. The company’s drug-coated balloons also face stiff competition in niche space.
Intuitive Surgical reported third-quarter 2018 adjusted earnings per share of $2.83, which exceeded the Zacks Consensus Estimate of $2.65. Revenues totaled $920.9 million, which outpaced the consensus mark of $918.6 million.
Stryker posted third-quarter 2018 adjusted earnings per share of $1.69, which beat the Zacks Consensus Estimate by a penny. Operating margin was 17.8%, up 30 bps.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Surmodics' (SRDX) Q4 Earnings and Revenues Beat Estimates
Surmodics, Inc. (SRDX - Free Report) reported adjusted earnings of 5 cents per share in fourth-quarter fiscal 2018, comparing favorably with the Zacks Consensus Estimate of a loss of a penny. Earnings however plummeted 72.2% on a year-over-year basis.
Revenues in the quarter increased 14.9% to $23 million, which beat the Zacks Consensus Estimate by 2.2%.
Over the past year, the Zacks Rank #3 (Hold) stock has skyrocketed 119.5% compared with the industry’s 4% rise. The current level is also higher than the S&P 500 index’s increase of 7.5%.
FY18 at a Glance
Adjusted earnings per share on a full-year basis were 49 cents, also down 3.9% from fiscal 2017.
Fiscal 2018 revenues totaled $81.3 million, up 11.2% from fiscal 2017.
On a full-year basis, Medical Device revenues (74.4% of net revenues) grossed $60.5 million, up 12.1% from fiscal 2017. Surmodics IVD segment (25.6% of net revenues) raked in $20.8 million, up 8.9% from a year ago.
Surmodics, Inc. Price, Consensus and EPS Surprise
Surmodics, Inc. Price, Consensus and EPS Surprise | Surmodics, Inc. Quote
Q4 Details
Notably, Product sales in the quarter were $10.7 million, up 21.3% year over year. Per management, the uptick can be attributed to a substantial increase in balloon catheter unit volume as a result of recent customer product launches.
Royalty and license fee revenues totaled $10.3 million, up 11.9% from the year-ago quarter.
Research, development and other revenues were $2 million, up 0.1% year over year.
Segmental Analysis
Surmodics reports revenues under two segments — Medical Device and In Vitro Diagnostics (IVD).
Medical Device
In the reported quarter, sales rose 15.4% to $17 million. Per management, this includes $2.2 million from Surmodics’ SurVeil agreement with Abbott Laboratories (ABT - Free Report) .
However, the Medical Device business unit reported $2.1 million of operating loss in the fourth quarter.
IVD
In the quarter under review, sales increased 13.4% to $6.1 million. Per management, the segment saw strong growth in antigen and DNA slide sales in the quarter.
Operating income in the segment was $2.4 million in the reported quarter, marginally down from the year-ago quarter’s level.
Operating Details
Surmodics registered Product costs of $4.1 million in the quarter, up 23.3% year over year.
The company had Research and development costs of $9.8 million, up 23.4%.
Selling, general and administrative expenditures were almost $12.6 million, up 29.6%.
Total operating costs and expenses in the quarter were $6.5 million, up 22.6%.
Total operating costs and expenses in the reported quarter were $25.5 million, up 29.7%.
Guidance
Surmodics expects fiscal 2019 revenues between $92 million and $97 million. The Zacks Consensus Estimate is pegged at $92.9 million, within the guided range.
Surmodics expects a loss of 7 cents per share to earnings of 23 cents per share for fiscal 2019. The Zacks Consensus Estimate for earnings per share is pinned at 3 cents, within the projected range.
Management expects Medical Device unit to contribute significantly to double-digit revenue growth in fiscal 2019.
Wrapping Up
Surmodics exited the fiscal 2018 on a solid note, with earnings and revenues topping estimates. The company continues to gain from its core Medical Device and IVD units. In fact, management expects notable contributions from them in fiscal 2019. Management also remains optimistic about agreement with MedTech behemoth Abbott for commercialization of its SurVeil drug-coated balloon. Surmodics also expects to complete the TRANSCEND clinical study enrollment by fiscal 2019.
On the flip side, significant year-over-year decline in Surmodics’ earnings per share is worrisome. Surging operating expenses and operating losses in the Medical Device unit are likely to keep margins under pressure. The company’s drug-coated balloons also face stiff competition in niche space.
Earnings of MedTech Majors at a Glance
Some better-ranked stocks from the broader Medical space that delivered robust results this earnings season are Intuitive Surgical (ISRG - Free Report) and Stryker Corporation (SYK - Free Report) . Notably, each of the stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intuitive Surgical reported third-quarter 2018 adjusted earnings per share of $2.83, which exceeded the Zacks Consensus Estimate of $2.65. Revenues totaled $920.9 million, which outpaced the consensus mark of $918.6 million.
Stryker posted third-quarter 2018 adjusted earnings per share of $1.69, which beat the Zacks Consensus Estimate by a penny. Operating margin was 17.8%, up 30 bps.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>