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Teleflex (TFX) Q4 Earnings Miss Estimates, Margins Rise
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Teleflex Incorporated (TFX - Free Report) announced earnings per share (EPS) from continuing operations of $2.77 for the fourth quarter of 2018, up 13.5% year over year. However, the bottom line missed the Zacks Consensus Estimate by a penny.
For the full year, adjusted earnings came in at $9.90 per share, a 17.9% increase on a year-over-year basis.
Net revenues in the fourth quarter rose 7.8% year over year to $641.6 million. Excluding the impact of currency fluctuations, fourth-quarter net revenues increased 9.4% year over year.
On a year-over-year basis, the company saw organic constant currency revenue growth of 9.1%. This includes the benefit of NeoTract becoming organic in the fourth quarter combined with strong growth from legacy product families.
The company registered revenues of $2.44 million in 2018, up 14.1% (up 12.95 at constant exchange rate or CER) from the year-ago period.
Revenues in Detail
In the fourth quarter, Teleflex’s Vascular North America segment recognized net revenues of $85.7 million, up 6.3% year over year at CER. The company registered strong growth in PICC (Peripherally Inserted Central Catheters), visual navigation products and EZ-IO.
The Interventional North America business registered net revenues of $69.7 million, a 13.3% rise on a year-over-year basis at CER. This upside was fueled by higher sales of Vascular Solutions products as well as growth in OnControl.
Within Anesthesia North America, net revenues climbed 4.8% at CER to $53.2 million. Growth in sales volumes of existing products and stronger new product sales during the fourth quarter were partially offset by price declines.
Surgical North America realized net revenues of $50.8 million, a 2.1% rise at CER on increased sales of airway and EZ-IO products.
Meanwhile, EMEA recorded revenue growth of 8.2% at CER to $150.9 million, driven by distributor convergence as well as increased sales of vascular access products.
Asia, OEM and All Other logged net revenues of $79.8 million, $52.7 million and $109.6 million, respectively (corresponding top-line growth of 5.5%, 15.4% and 21.4% each at CER), in the quarter under review.
Margin
Gross margin of 57% in the quarter under discussion was up 144 basis points (bps) year over year on 10.6% improvement in gross profits to $365.8 million. Adjusted operating margin expanded 317 bps to 18.6% on 29.9% rise in operating profit to $119.5 million.
Liquidity Position
The company exited 2018 with cash and cash equivalents of $357.2 million compared with $333.6 million at the end of 2017. Full year, net cash provided by operating activities was $435.1 million compared with $426.3 million in the year-ago period.
Outlook
Teleflex has provided its 2019 guidance. Revenues are expected to increase in the band of 5% to 6% from the year-ago period.This reflects an 1% unfavorable impact of foreign exchange translation.
The company forecasts full-year adjusted earnings per share from continuing operations in the $10.90-$11.10 band, representing an increase of 10.1% to 12.1% over 2018 and reflecting a 2% negative impact from foreign exchange translation.
Our Take
Notably Teleflex continues to report a robust improvement in revenues, banking on balanced growth across all segments and geographies. The company’s newly-acquired NeoTract has started to contribute to its top line quite handsomely. We are also upbeat about Urolift that maintained its sturdy momentum in the fourth quarter, delivering $49 million in revenues, an approximate 45% increase from the prior-year period.
Zacks Rank & Key Picks
Teleflex currently carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Abbott Laboratories (ABT - Free Report) , AngioDynamics Inc. (ANGO - Free Report) and CONMED, Corp. (CNMD - Free Report) .
Abbott reported fourth-quarter 2018 adjusted EPS of 81 cents, in line with the Zacks Consensus Estimate. Revenues of $7.77 billion were below the Zacks Consensus Estimate of $7.79 billion. The stock has a Zacks Rank #2 (Buy).
AngioDynamics’ fiscal second-quarter adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, beating the consensus estimate by 2.9%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CONMED delivered fourth-quarter adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million beat the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.
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Teleflex (TFX) Q4 Earnings Miss Estimates, Margins Rise
Teleflex Incorporated (TFX - Free Report) announced earnings per share (EPS) from continuing operations of $2.77 for the fourth quarter of 2018, up 13.5% year over year. However, the bottom line missed the Zacks Consensus Estimate by a penny.
For the full year, adjusted earnings came in at $9.90 per share, a 17.9% increase on a year-over-year basis.
Net revenues in the fourth quarter rose 7.8% year over year to $641.6 million. Excluding the impact of currency fluctuations, fourth-quarter net revenues increased 9.4% year over year.
On a year-over-year basis, the company saw organic constant currency revenue growth of 9.1%. This includes the benefit of NeoTract becoming organic in the fourth quarter combined with strong growth from legacy product families.
The company registered revenues of $2.44 million in 2018, up 14.1% (up 12.95 at constant exchange rate or CER) from the year-ago period.
Revenues in Detail
In the fourth quarter, Teleflex’s Vascular North America segment recognized net revenues of $85.7 million, up 6.3% year over year at CER. The company registered strong growth in PICC (Peripherally Inserted Central Catheters), visual navigation products and EZ-IO.
The Interventional North America business registered net revenues of $69.7 million, a 13.3% rise on a year-over-year basis at CER. This upside was fueled by higher sales of Vascular Solutions products as well as growth in OnControl.
Within Anesthesia North America, net revenues climbed 4.8% at CER to $53.2 million. Growth in sales volumes of existing products and stronger new product sales during the fourth quarter were partially offset by price declines.
Surgical North America realized net revenues of $50.8 million, a 2.1% rise at CER on increased sales of airway and EZ-IO products.
Meanwhile, EMEA recorded revenue growth of 8.2% at CER to $150.9 million, driven by distributor convergence as well as increased sales of vascular access products.
Asia, OEM and All Other logged net revenues of $79.8 million, $52.7 million and $109.6 million, respectively (corresponding top-line growth of 5.5%, 15.4% and 21.4% each at CER), in the quarter under review.
Margin
Gross margin of 57% in the quarter under discussion was up 144 basis points (bps) year over year on 10.6% improvement in gross profits to $365.8 million. Adjusted operating margin expanded 317 bps to 18.6% on 29.9% rise in operating profit to $119.5 million.
Liquidity Position
The company exited 2018 with cash and cash equivalents of $357.2 million compared with $333.6 million at the end of 2017. Full year, net cash provided by operating activities was $435.1 million compared with $426.3 million in the year-ago period.
Outlook
Teleflex has provided its 2019 guidance. Revenues are expected to increase in the band of 5% to 6% from the year-ago period.This reflects an 1% unfavorable impact of foreign exchange translation.
The company forecasts full-year adjusted earnings per share from continuing operations in the $10.90-$11.10 band, representing an increase of 10.1% to 12.1% over 2018 and reflecting a 2% negative impact from foreign exchange translation.
Our Take
Notably Teleflex continues to report a robust improvement in revenues, banking on balanced growth across all segments and geographies. The company’s newly-acquired NeoTract has started to contribute to its top line quite handsomely. We are also upbeat about Urolift that maintained its sturdy momentum in the fourth quarter, delivering $49 million in revenues, an approximate 45% increase from the prior-year period.
Zacks Rank & Key Picks
Teleflex currently carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Abbott Laboratories (ABT - Free Report) , AngioDynamics Inc. (ANGO - Free Report) and CONMED, Corp. (CNMD - Free Report) .
Abbott reported fourth-quarter 2018 adjusted EPS of 81 cents, in line with the Zacks Consensus Estimate. Revenues of $7.77 billion were below the Zacks Consensus Estimate of $7.79 billion. The stock has a Zacks Rank #2 (Buy).
AngioDynamics’ fiscal second-quarter adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, beating the consensus estimate by 2.9%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CONMED delivered fourth-quarter adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million beat the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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