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Merit Medical (MMSI) Beats Q2 Earnings and Revenue Estimates
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Merit Medical Systems, Inc. (MMSI - Free Report) reported second-quarter 2020 adjusted earnings per share (EPS) of 31 cents, which beat the Zacks Consensus Estimate of 3 cents. Moreover, the bottom line fell 26.2% from the year-ago quarter.
On a GAAP basis, loss per share came in at 34 cents against EPS of 12 cents in the year-ago quarter.
Revenues in Details
This Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $218.4 million, down 14.5% from the year-ago quarter. On a comparable constant-currency basis, the figure fell 13.6% year over year. However, the top line surpassed the Zacks Consensus Estimate of $193.23 million by 13%.
The Cardiovascular unit reported second-quarter revenues of $212.2 million, down 14% year over year due to a year-over-year decrease of 18.2% in Peripheral Intervention revenues to $72.6 million. Further, revenues from Cardiac Intervention fell 17.1% to $66 million. Moreover, revenues from Custom Procedural Solutions fell 4% to $45.3 million. Also, OEM revenues fell 8.9% to $28.2 million.
Revenues from the Endoscopy devices totaled $6.2 million, down 30.1% year over year.
Margins
In the quarter under review, gross profit totaled $84.2 million, down 24.8% on a year-over-year basis. Gross margin came in at 38.6% of net revenues, down 525 basis points (bps) year over year.
Adjusted operating profit totaled $3.4 million, down 96.4% year over year.
Adjusted operating margin in the quarter came in at 1.6%, indicating a contraction of 3586 bps year over year.
Merit Medical Systems, Inc. Price, Consensus and EPS Surprise
The company exited the second quarter with cash and cash equivalents of $49.7 million, down from $50.1 million at the end of the first quarter.
2020 Guidance
Due to the continued uncertainty and rapid change in the global environment on account of the coronavirus pandemic, management has been unable to provide any financial guidance for the remainder of 2020.
Wrapping Up
Merit Medical exited the second quarter of 2020 on a strong note. The company received CE mark for the Merit WRAPSODY Endoprosthesis Stent System in the quarter and has initiated its commercialization in the European Union. It also attained FDA approval for the WRAPSODY Arterial Venous access Efficacy (WAVE) IDE trial.
The acquisitions of Cianna Medical and Vascular Insights continue to contribute. Further, the company stands to benefit from the execution of the global growth and profitability plan. A robust pipeline of new products and other internally-developed products instill investor optimism in the stock. Despite COVID-19, the company has witnessed robust demand for several of its critical care products, such as hemodynamic monitoring, peritoneal dialysis catheters and insertion tools apart from its infection control products.
However, we are concerned about the revenue decline at every key operating segment. Contraction in both margins is a concern as well. Also, stiff competition and higher consolidation in the healthcare industry are dampeners. Further, economic stagnation due to the outbreak added to the woes.
Zacks Rank and Key Picks
Merit Medical currently holds a Zacks Rank #3 (Hold).
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%.
LabCorp reported second-quarter 2020 EPS of $2.57, outpacing the Zacks Consensus Estimate of 78 cents. Revenues of $2.77 billion surpassed the consensus estimate by 14.3%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Merit Medical (MMSI) Beats Q2 Earnings and Revenue Estimates
Merit Medical Systems, Inc. (MMSI - Free Report) reported second-quarter 2020 adjusted earnings per share (EPS) of 31 cents, which beat the Zacks Consensus Estimate of 3 cents. Moreover, the bottom line fell 26.2% from the year-ago quarter.
On a GAAP basis, loss per share came in at 34 cents against EPS of 12 cents in the year-ago quarter.
Revenues in Details
This Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $218.4 million, down 14.5% from the year-ago quarter. On a comparable constant-currency basis, the figure fell 13.6% year over year. However, the top line surpassed the Zacks Consensus Estimate of $193.23 million by 13%.
The Cardiovascular unit reported second-quarter revenues of $212.2 million, down 14% year over year due to a year-over-year decrease of 18.2% in Peripheral Intervention revenues to $72.6 million. Further, revenues from Cardiac Intervention fell 17.1% to $66 million. Moreover, revenues from Custom Procedural Solutions fell 4% to $45.3 million. Also, OEM revenues fell 8.9% to $28.2 million.
Revenues from the Endoscopy devices totaled $6.2 million, down 30.1% year over year.
Margins
In the quarter under review, gross profit totaled $84.2 million, down 24.8% on a year-over-year basis. Gross margin came in at 38.6% of net revenues, down 525 basis points (bps) year over year.
Adjusted operating profit totaled $3.4 million, down 96.4% year over year.
Adjusted operating margin in the quarter came in at 1.6%, indicating a contraction of 3586 bps year over year.
Merit Medical Systems, Inc. Price, Consensus and EPS Surprise
Merit Medical Systems, Inc. price-consensus-eps-surprise-chart | Merit Medical Systems, Inc. Quote
Financial Update
The company exited the second quarter with cash and cash equivalents of $49.7 million, down from $50.1 million at the end of the first quarter.
2020 Guidance
Due to the continued uncertainty and rapid change in the global environment on account of the coronavirus pandemic, management has been unable to provide any financial guidance for the remainder of 2020.
Wrapping Up
Merit Medical exited the second quarter of 2020 on a strong note. The company received CE mark for the Merit WRAPSODY Endoprosthesis Stent System in the quarter and has initiated its commercialization in the European Union. It also attained FDA approval for the WRAPSODY Arterial Venous access Efficacy (WAVE) IDE trial.
The acquisitions of Cianna Medical and Vascular Insights continue to contribute. Further, the company stands to benefit from the execution of the global growth and profitability plan. A robust pipeline of new products and other internally-developed products instill investor optimism in the stock. Despite COVID-19, the company has witnessed robust demand for several of its critical care products, such as hemodynamic monitoring, peritoneal dialysis catheters and insertion tools apart from its infection control products.
However, we are concerned about the revenue decline at every key operating segment. Contraction in both margins is a concern as well. Also, stiff competition and higher consolidation in the healthcare industry are dampeners. Further, economic stagnation due to the outbreak added to the woes.
Zacks Rank and Key Picks
Merit Medical currently holds a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. and Laboratory Corporation of America Holdings (LH - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). 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%.
LabCorp reported second-quarter 2020 EPS of $2.57, outpacing the Zacks Consensus Estimate of 78 cents. Revenues of $2.77 billion surpassed the consensus estimate by 14.3%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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