Surmodics, Inc. (SRDX - Free Report) reported adjusted earnings per share (EPS) of 21 cents in third-quarter fiscal 2020, which beat the Zacks Consensus Estimate of 10 cents. Also, the bottom line rose 40% from the year-ago quarter.
On a GAAP (reported) basis, EPS came in at 18 cents, up 63.6% from the prior-year quarter.
Revenues in the quarter improved 10% year over year to $26.9 million. Also, the figure beat the Zacks Consensus Estimate of $25 million by 8.4%.
Fiscal Q3 Highlights
In the quarter under review, Product sales were $11.9 million, up 20.2% from the prior-year quarter. Royalty and license fee revenues totaled $12.4 million, up 6.7% from the prior-year quarter. Research, development and other revenues were $2.5 million, down 13.8% year over year.
Segmental Analysis
Medical Device
In the reported quarter, sales at the segment rose to $20.5 million (comprising 76.3% of total revenues), up 8% from the year-ago quarter.
In Vitro Diagnostics
In the quarter under review, sales improved 18% to $6.4 million (23.7% of total revenues).
Operational Details
Gross profit for the quarter came in at 22.4 million, up 6.9% year over year. Gross margin was 83.5%, down 271 basis points (bps).
The company reported adjusted operating profit of $1.7 million, which fell 1.2% from the year-ago quarter. Adjusted operating margin was 6.3%, showing a contraction of 74 bps.
Fiscal 2020 Guidance
Due to the continued uncertainty surrounding the duration and extent of the COVID-19 pandemic, Surmodics will not issue any financial guidance for fiscal 2020.
Our Take
Surmodics exited the fiscal third quarter on a solid note. The company registered revenue growth in each of its core units viz. In Vitro Diagnostics and Medical Device.The company also saw an increase in Product sales and Royalty and license fee revenues in the quarter under review.
Management is upbeat about Surmodics’ partnership with Cook Medical for commercialization of .014” and .018” low-profile PTA balloon catheters. The company attained CE Mark for its SurVeil drug coated balloon (DCB). It also received FDA clearance for Sublime radial-access 0.014” PTA balloon catheter. It has initiated first-in-human clinical trial for Sundance below-the-knee DCB
However, decline in research, development and other revenues is a concern. Contraction of both margins is also worrisome.
Zacks Rank and Other Key Picks
Surmodics currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. and OPKO Health, Inc. (OPK - Free Report) . While PerkinElmer sports a Zacks Rank #1 (Strong Buy),the other two carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.
PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.
OPKO Health reported second-quarter 2020 EPS of 5 cents against the Zacks Consensus Estimate of a loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.
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Surmodics, Inc. (SRDX - Free Report) reported adjusted earnings per share (EPS) of 21 cents in third-quarter fiscal 2020, which beat the Zacks Consensus Estimate of 10 cents. Also, the bottom line rose 40% from the year-ago quarter.
On a GAAP (reported) basis, EPS came in at 18 cents, up 63.6% from the prior-year quarter.
Revenues in the quarter improved 10% year over year to $26.9 million. Also, the figure beat the Zacks Consensus Estimate of $25 million by 8.4%.
Fiscal Q3 Highlights
In the quarter under review, Product sales were $11.9 million, up 20.2% from the prior-year quarter. Royalty and license fee revenues totaled $12.4 million, up 6.7% from the prior-year quarter. Research, development and other revenues were $2.5 million, down 13.8% year over year.
Segmental Analysis
Medical Device
In the reported quarter, sales at the segment rose to $20.5 million (comprising 76.3% of total revenues), up 8% from the year-ago quarter.
In Vitro Diagnostics
In the quarter under review, sales improved 18% to $6.4 million (23.7% of total revenues).
Operational Details
Gross profit for the quarter came in at 22.4 million, up 6.9% year over year. Gross margin was 83.5%, down 271 basis points (bps).
The company reported adjusted operating profit of $1.7 million, which fell 1.2% from the year-ago quarter. Adjusted operating margin was 6.3%, showing a contraction of 74 bps.
Fiscal 2020 Guidance
Due to the continued uncertainty surrounding the duration and extent of the COVID-19 pandemic, Surmodics will not issue any financial guidance for fiscal 2020.
Our Take
Surmodics exited the fiscal third quarter on a solid note. The company registered revenue growth in each of its core units viz. In Vitro Diagnostics and Medical Device.The company also saw an increase in Product sales and Royalty and license fee revenues in the quarter under review.
Management is upbeat about Surmodics’ partnership with Cook Medical for commercialization of .014” and .018” low-profile PTA balloon catheters. The company attained CE Mark for its SurVeil drug coated balloon (DCB). It also received FDA clearance for Sublime radial-access 0.014” PTA balloon catheter. It has initiated first-in-human clinical trial for Sundance below-the-knee DCB
However, decline in research, development and other revenues is a concern. Contraction of both margins is also worrisome.
Zacks Rank and Other Key Picks
Surmodics currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. and OPKO Health, Inc. (OPK - Free Report) . While PerkinElmer sports a Zacks Rank #1 (Strong Buy),the other two carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.
PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.
OPKO Health reported second-quarter 2020 EPS of 5 cents against the Zacks Consensus Estimate of a loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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