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Glaukos (GKOS) Loses 17.1% Despite Q2 Earnings & Revenues Beat

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Shares of Glaukos Corporation (GKOS - Free Report) have declined 17.1% as of Aug 11, 2020, despite delivering better-than-expected results.

The company reported second-quarter 2020 loss per share of 61 cents, narrower than the Zacks Consensus Estimate of a loss of 78 cents. Notably, the company had delivered earnings per share (EPS) of 1 cent in the prior-year quarter.

Revenues in Detail

Quarterly net sales totaled $31.6 million, which surpassed the Zacks Consensus Estimate by 55.9%. On a year-over-year basis, however, revenues plunged 46.1%. Per management, the downside can be attributed disruptions related to the COVID-19 pandemic. However, contribution from the Avedro buyout partially mitigated the downside.

Quarter Details

Gross profit in the second quarter was $9.9 million, down 80.5% year over year. Gross margin was 31.3% of net revenues, down 5530 basis points on a year-over-year basis.

Glaukos Corporation Price, Consensus and EPS Surprise

Glaukos Corporation Price, Consensus and EPS Surprise

Glaukos Corporation price-consensus-eps-surprise-chart | Glaukos Corporation Quote

Operating expenses increased 0.2% to $57.1 million on a year-over-year basis, courtesy of higher selling, general and administrative, and research and development expenses.

Operating loss in the quarter under review was $47.2 million, substantially wider than the year-ago quarter’s loss of $6.2 million.

Financial Update

The company exited the second quarter with cash and cash equivalents of $266.9 million, down from $53.6 million on a sequential basis.

During the second quarter, total current assets came in at $453.2 million compared with $231.4 million in the preceding quarter.

2020 Guidance

Glaukos has withdrawn its previously announced (Feb 27, 2020) annual guidance for 2020 due to the rapidly evolving environment and continued uncertainties stemming from the COVID-19 pandemic. At this point, the company is unable to estimate the scope and duration of the impact of the pandemic on its financial and operating results.

Our Take

Glaukos exited the second quarter on a strong note. However, the company witnessed a weak quarter, reflecting decline in revenues at its global Glaucoma franchise. The company also reported a fall in revenues in the second quarter. It also faces cut-throat competition in the Medical Devices space. The company witnessed a contraction in its gross margin in the quarter under review.

Nonetheless, advancement in its market-expanding pipeline and execution of quite a few business development growth initiatives that include the Avedro buyout buoys optimism.

Zacks Rank

Glaukos carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. and West Pharmaceutical Services, Inc. (WST - Free Report) . While PerkinElmer sports a Zacks Rank of 1 (Strong Buy), both Thermo Fisher and West Pharmaceuticals carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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%.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion surpassed the consensus mark by 0.1%.

West Pharmaceuticals reported second-quarter 2020 adjusted EPS of $1.25, outpacing the Zacks Consensus Estimate of 91 cents. Revenues of $527.2 million surpassed the consensus estimate by 6.9%.

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