Back to top

Image: Bigstock

How Has TFX Performed 30 Days Post Earnings

Read MoreHide Full Article

A month has gone by since the last earnings report for Teleflex (TFX - Free Report) . Shares were flat in that time frame, underperforming the S&P 500.

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

Teleflex Earnings and Revenues Beat Estimates in Q2

Teleflex' adjusted earnings per share (EPS) from continuing operations of $1.93 for the second quarter of 2020 were down 27.4% year over year. The bottom line however surpassed the Zacks Consensus Estimate by 55.7%.

GAAP EPS for the second quarter was 24 cents, reflecting a massive plunge from the year-ago $1.77.

Revenues in Detail

Net revenues in the second quarter dropped 13.1% year over year to $567 million and 12% on a constant exchange rate or CER. The top line surpassed the Zacks Consensus Estimate by 6.5%.Per the company’s estimates, COVID-19 had a net negative impact on revenues of approximately $130 million or 20%.

Segmental Revenues

In the second quarter, the Vascular Access segment reported net revenues of $169.4 million, up 8.8% year over year at CER. The company registered strong growth within both central venous catheter and EZ-IO products.COVID-19 had a 5% positive impact on this segment’s sales in the second quarter.

The Interventional business registered net revenues of $82.6 million, down 20.3% on a year-over-year basis at CER. Revenues were largely dented by delay in the performance of certain non-emergent procedures because of COVID-19. There was a 24% COVID-19 related headwind in the quarter.

Within the Anesthesia segment, net revenues dropped 23% to $64.9 million, primarily owing to lower sales of laryngeal masks and regional anesthesia products.COVID-19 had an approximately 22% negative impact on this business in the quarter.

The Surgical segment recorded net revenues of $67.3 million, reflecting a 28.4% fall at CER due to lower sales of ligation portfolio and instruments. The company gauged a significant 30% headwind from COVID-19 on this business.

Revenues of $40.1 million in the Interventional Urology segment plummeted 40.9% on a year-over-year basis at CER. The cancellation of elective procedures impacted this product line more than any other segment of the company. Teleflex estimated an approximate $58 million COVID-19-related headwind in the second quarter on this business.

Meanwhile, OEM recorded revenue growth of $55.8 million, down 0.7%. While the company saw growth in April and May within this segment, it was offset by a 13% decline in sales in June.

The Other product segment (consisting of the company’s respiratory and urology care products) registered net revenues of $91.4 million, highlighting growth of 5.4% at CER. The growth was primarily supported by increased demand for respiratory products, such as filters and humidification, resulting from COVID-19.

Margins

In the reported quarter, gross profit totaled $278.3 million, down 20.9% year over year. Gross margin contracted 489 basis points (bps) to 49.1%.

Overall adjusted operating profit was $57.8 million, down 47% year over year. Adjusted operating margin saw a massive plunge of 653 bps year over year to 10.2%.

Liquidity Position

Teleflex exited the second quarter with cash and cash equivalents of $553.5 million, up from $406.5 million at the end of the first quarter.

Cumulative cash flow used in operating activities from continuing operations at the end of the second quarter was $134 million against net cash provided by operating activities of $157.3 million in the year-ago period.

2020 Outlook

Teleflex is currently unable to ascertain the scope and duration of the pandemic as well as quantify the actual impact. The company also anticipates material disruption caused by the evolving COVID-19 pandemic and macroeconomic environment. It further expects significant adverse financial impact of the coronavirus pandemic. Accordingly, this time too the company has not provided its 2020 outlook.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -11.86% due to these changes.

VGM Scores

Currently, Teleflex has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Teleflex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Teleflex Incorporated (TFX) - free report >>

Published in