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Integer Holdings (ITGR) Gains 2.4% Post Q4 Earnings Beat

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Shares of Integer Holdings Corporation (ITGR - Free Report) have gained 2.4% on Feb 22, following the company's fourth-quarter 2020 results.

The company reported fourth-quarter 2020 adjusted earnings per share (EPS) of 71 cents, which outpaced the Zacks Consensus Estimate of 62 cents by 14.5%. However, the bottom line plunged 43.2% on a year-over-year basis.

For the full-year 2020, the company reported adjusted EPS of $2.77 per share, down 40.8% from 2019.

Revenue Details

Revenues declined 17.4% year over year to $268.9 million on a reported basis. Nonetheless, the top line beat the Zacks Consensus Estimate by 2.2%.

The company delivered $1.07 billion, down 14.7% from 2019.

Segmental Analysis

Integer Holdings operates through two segments — Medical Sales and Non-Medical Sales.

Medical Sales

At the segment, reported revenues were $260.6 million, down 16.4% year over year. Revenues declined 16.7% from the prior-year quarter on an organic basis.

Medical Sales has three sub-segments — Advanced Surgical, Orthopedics and Portable Medical (AS&O); Cardio & Vascular; and Cardiac & Neuromodulation.

Advanced Surgical, Orthopedics and Portable Medical

Integer Holdings’ Advanced Surgical, Orthopedics & Portable Medical segment has been divested to Viant. Consequently, revenues at the segment comprise net sales from acquirer Viant under supply agreements associated with the divestiture.

Revenues amounted to $29.7 million, down 12.2% year over year and 12.2% on an organic basis. Per management, the downside was due to the impact of the COVID-19 pandemic and a blend of customers’ responses.

Cardio & Vascular

Revenues at the segment totaled $137.1 million, down 13.5% from the prior-year quarter and 14.3% organically. Per management, this can be attributed to the impact of the pandemic and customers’ responses throughout nearly all Cardio & Vascular markets.

Cardiac & Neuromodulation

Revenues at this segment totaled $93.8 million, declining 21.3% on both year-over-year and organic basis. This was due to a slump in CRM and Neuromodulation (corresponding to the impact of the pandemic and a blend of customers’ responses).

Non-Medical Sales

Reported revenues at the segment totaled $8.3 million, down 40.6% on both year-over-year and organic basis.

Margin Analysis

Integer Holdings generated a gross profit of $73.2 million in the fourth quarter, down 3.7% year over year. As a percentage of revenues, gross margin in the reported quarter expanded 390 basis points (bps) to 27.2%.

Selling, general and administrative expenses (SG&A) were $3.5 million, down 6.9% year over year.

Research, development and engineering costs were $10.6 million in the quarter, down 10.3% year over year.

Total operating income amounted to $27.6 million, which improved 21.8% year over year. Operating margin in the quarter under review was 10.3%, up 340 bps year over year.

2021 Guidance

For first-quarter 2021, the company projects sales to be $280-$290 million. Adjusted operating income is expected between $42 million and $47 million.

For the full-year 2021, the company projects sales to be $1.16-$1.20 billion. The Zacks Consensus Estimate for the same is pegged at $1.18 billion.

Adjusted EPS is anticipated to be $3.40-$3.90. The consensus mark stands at $3.60 per share.

Adjusted operating income is projected to be $170-$190 million.

Summing Up

Integer Holdings exited the fourth quarter on a strong note, wherein both earnings and revenues beat their respective Zacks Consensus Estimates. However, the company witnessed weak performance across its segments in the quarter under review.

Nonetheless, a solid guidance looks promising. Further, higher demand for ventilator and patient monitoring components fuel optimism. Also, expansion in both gross and operating margins is a positive.

Zacks Rank

Currently, Integer Holdings carries a Zacks Rank #3 (Hold).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Hologic, Inc. (HOLX - Free Report) , Abbott Laboratories (ABT - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.

Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which beat the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.

AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%.

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