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SurModics (SRDX) Down 22.1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for SurModics (SRDX - Free Report) . Shares have lost about 22.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is SurModics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Surmodics Q1 Earnings Beat Estimates, Revenues Miss

Surmodics, Inc. reported adjusted earnings per share of 5 cents in first-quarter fiscal 2020 improved from the Zacks Consensus Estimate of a loss of 3 cents. However, the bottom line plunged 58.3% from the year-ago quarter.

On a GAAP (reported) basis EPS came in at 1 cent compared with 9 cents in the prior-year quarter.

Revenues in the quarter improved 1.7% year over year to $22.6 million. This figure missed the Zacks Consensus Estimate by 0.9%.

Fiscal Q1 Highlights

In the quarter under review, Product sales were $9.9 million, up 2.3% from the prior-year quarter. Royalty and license fee revenues totaled $10.1 million, up 0.5% from the prior-year quarter. Research, development and other were $2.5 million, up 4.2% year over year.

In the reported quarter, Surmodics announced partnership with Medtronic with respect to distribution of Telemark coronary support catheter.

Segmental Analysis

Medical Device

In the reported quarter, sales at the segment rose 0.8% to $17.4 million, including $1.3 million from the SurVeil agreement with Abbott, compared with $2.4 million in the year-ago quarter. The Medical Device business unit reported an operating loss of $0.4 million in the fiscal first quarter against an operating income of $0.4 million in the year-ago quarter.

In Vitro Diagnostics

In the quarter under review, sales improved 4.6% to $5.2 million. Operating income at the segment was $2.6 million in the reported quarter, up 5.9% from the prior-year quarter.

Operational Details

The company’s research and development costs totaled $12.1 million, up 5.7% year over year.

Selling, general and administrative expenditures were almost $6.9 million, up 16.7% from the prior-year quarter.

Total operating costs and expenses in the quarter were $22.9 million, up 6.3% year over year. The company reported adjusted operating income of $0.3 million, which plunged 74.4% from the year-ago quarter.

Fiscal 2020 Guidance Reiterated

Surmodics continues to expect revenues to range between $87 million and $91 million. The Zacks Consensus Estimate for the metric is pegged at $89.4 million, within the guided range.

Adjusted loss per share is projected between 14 cents and 44 cents.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, SurModics has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

SurModics has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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