Avanos Medical, Inc. ( AVNS Quick Quote AVNS - Free Report) reported adjusted earnings per share (EPS) of 23 cents for first-quarter 2021, beating the Zacks Consensus Estimate by 27.8%. Also, the bottom line rose 43.8% year over year. Revenues Revenues for the quarter were $180.7 million, which beat the Zacks Consensus Estimate by 2.3%. Moreover, the top line inched up a marginal 0.2% on a year-over-year basis. Q1 Segmental Analysis Chronic Care Net revenues of $121.1 million rose 4.7% year over year. Pain Management Net revenues of $59.6 million declined 7.9% on a year-over-year basis. Margin Analysis Gross profit was $91 million, down 10.6% from the prior-year quarter. Gross margin was 50.5% of net revenues, down 607 bps year over year. Adjusted operating profit in the first quarter was $10 million, up from $1.6 million in the year-ago quarter. Adjusted operating margin came in at 5.3%, expanding 443 bps year over year. Financial Update The company exited the first quarter of 2021 with cash and cash equivalents worth $100.1 million compared with $111.5 million in the fourth quarter of 2020. Net cash used in operating activities at the end of the first quarter totaled $3.3 million compared with net cash utilized in operating activities of $5.8 million in the prior-year quarter.
Guidance The company projected 2021 net sales to increase 2-4% on constant currency basis from the 2020 reported level. The Zacks Consensus Estimate for revenues is pegged at $736.5 million. The adjusted EPS for 2021 is projected between $1.10 and $1.25. The Zacks Consensus Estimate for the same stands at $1.19. Summing Up Avanos exited the first quarter on a strong note. The company continues to gain from its core segment Chronic Care. Also, CORPAK and NeoMed products contributed strongly to its earnings. Further, a rise in global demand for Respiratory Health amid the pandemic aided the company’s quarterly performance. The expansion in adjusted operating margin is another plus. However, contraction in gross margin remains a woe. Also, the company’s Pain Management unit performed weakly. Moreover, being a pure-play MedTech company, it faces stiff competition from other industry players. Zacks Rank and Key Picks Avanos currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Boston Scientific Corp. ( BSX Quick Quote BSX - Free Report) , Integer Holdings Corp. ( ITGR Quick Quote ITGR - Free Report) and HCA Healthcare, Inc. ( HCA Quick Quote HCA - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Boston Scientific posted adjusted earnings per share (EPS) of 37 cents for the first quarter of 2021, which exceeded the Zacks Consensus Estimate by 23.3%. Revenues of $2.75 billion also exceeded the Zacks Consensus Estimate by 5.3%. Integer Holdings reported first-quarter 2021 adjusted EPS of 97 cents, which outpaced the Zacks Consensus Estimate by 12.8%. Revenues of $290.5 million also beat the Zacks Consensus Estimate by 2.6%. HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion too trumped the Zacks Consensus Estimate by 2.2%. Zacks Top 10 Stocks for 2021 In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021? Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys. Access Zacks Top 10 Stocks for 2021 today >>