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Teleflex (TFX) Q3 Earnings Top Estimates, Full-Year EPS View Up
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Teleflex Incorporated’s (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $3.51 for the third quarter of 2021 rose 26.7% year over year. The bottom line surpassed the Zacks Consensus Estimate by 15.8%.
GAAP EPS of $4.20 for the third quarter was a huge improvement from the year-ago figure of $2.46.
Revenues in Detail
Net revenues in the third quarter improved 11.5% year over year to $700.3 million and 10.3% on a constant exchange rate or CER. The top line surpassed the Zacks Consensus Estimate by 0.12%.
Americas’ net revenues of $417.3 million increased 11.3% from the year-ago period and 10.9% at CER. The Surgical, Vascular and Interventional businesses contributed to year-over-year growth in this region. However, this upside was partially offset by the impact of a halt in elective surgical procedures.
EMEA net revenues of $143.9 million rose 6% year over year and 3.6% at CER on strength in Interventional and Vascular products. Further, this region benefited from a favorable COVID-related comparison due to year-over-year improvement in procedure volumes as countries continued to open up despite COVID-led disruptions.
Teleflex Incorporated Price, Consensus and EPS Surprise
Revenues in Asia rose 9.9% reportedly and 6.3% on a CER basis year over year to $75 million. Japan registered robust growth in the third quarter, growing north of 30%, partially offset by the impact of COVID-19 in Southeast Asia.
Segmental Revenues
In the third quarter, the Vascular Access segment reported net revenues of $175.5 million, up 9.7% year over year and 8.5% at CER. The Interventional business registered net revenues of $104.3 million, up 11.9% year over year and 10.4% at CER.
Within the Anesthesia segment, net revenues improved 28.3% year over year and 26.6% at CER to $97.1 million. The Surgical segment recorded net revenues of $92.8 million, reflecting an increase of 12.9% year over year and a 10.9% increase at CER. Revenues of $83.1 million in the Interventional Urology segment rose 1.6% year over year and 1.5% at CER.
Meanwhile, OEM recorded revenue growth of $64.1 million, up 29.8% year over year and 29.4% at CER. The Other product segment’s (consisting of the company’s respiratory products that were not included in the divestiture to Medline, manufacturing service agreement revenues and Urology Care products) net revenues of $83.4 million registered a decline of 3% year over year and 4.3% at CER.
Margins
In the reported quarter, gross profit totaled $387.8 million, up 17.8% year over year. Gross margin expanded 296 basis points (bps) to 55.4%.
Overall, adjusted operating profit was $150.8 million, up 17.4% year over year. Adjusted operating margin saw a 109-bp expansion year over year to 21.5%.
Liquidity Position
Teleflex exited the third quarter of 2021 with cash and cash equivalents of $481.2 million, up from $361.8 million at the end of second-quarter 2021.
Cumulative cash flow provided by operating activities from continuing operations at the end of the third quarter was $450.5 million compared with operating cash flow of $241.5 million in the year-ago period.
The company slashed its full-year GAAP revenue growth projection to the range of 10-11% year over year from the earlier guidance of 10.5-11.75%. The company also reduced its constant currency revenue growth projection for 2021 to the range of 8-9% year over year (from the previously-announced 8.5-9.75% range). Per the company, this realized outlook mirrors the benefits of its diversified portfolio, offset by decreased UroLift revenues from the slower-than-anticipated rebound in elective surgical procedures. The current Zacks Consensus Estimate is pegged at $2.82 billion.
The company currently projects adjusted EPS from continuing operations for 2021 between $13.15 and $13.35 (an improvement from the earlier-expected band of $12.9-$13.1). The Zacks Consensus Estimate for the same is currently pegged at $12.96.
Our Take
Teleflex exited the third quarter of 2021 with better-than-expected results. The year-over-year growth in earnings and revenues looks impressive as well. Geographically, the company’s performance was strong in the Americas, EMEA and Asia despite headwinds from the more lethal Delta variant. Expansion of both margins is another upside. The raised EPS guidance for 2021 buoys optimism.
However, a year-over-year decline in the company’s Other product segment is concerning. Further, a lowered full-year 2021 revenue guidance on reduced UroLift gains does not bode well. Rising operating expenses are other downsides.
Zacks Rank and Key Picks
Teleflex currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and SARTORIUS (SARTF - Free Report) .
Thermo Fisher, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $5.76, which beat the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the consensus mark by 12%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical reported third-quarter 2021 adjusted EPS of $2.06, which surpassed the Zacks Consensus Estimate by 13.2%. Revenues of $706.5 million outpaced the Zacks Consensus Estimate by 3.2%. It currently carries a Zacks Rank #2.
SARTORIUS reported third-quarter 2021 adjusted EPS of $2.55, surpassing the Zacks Consensus Estimate by 7.6%. Revenues of $1.06 billion surpassed the Zacks Consensus Estimate by 5.2%. It currently carries a Zacks Rank #2.
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Teleflex (TFX) Q3 Earnings Top Estimates, Full-Year EPS View Up
Teleflex Incorporated’s (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $3.51 for the third quarter of 2021 rose 26.7% year over year. The bottom line surpassed the Zacks Consensus Estimate by 15.8%.
GAAP EPS of $4.20 for the third quarter was a huge improvement from the year-ago figure of $2.46.
Revenues in Detail
Net revenues in the third quarter improved 11.5% year over year to $700.3 million and 10.3% on a constant exchange rate or CER. The top line surpassed the Zacks Consensus Estimate by 0.12%.
Americas’ net revenues of $417.3 million increased 11.3% from the year-ago period and 10.9% at CER. The Surgical, Vascular and Interventional businesses contributed to year-over-year growth in this region. However, this upside was partially offset by the impact of a halt in elective surgical procedures.
EMEA net revenues of $143.9 million rose 6% year over year and 3.6% at CER on strength in Interventional and Vascular products. Further, this region benefited from a favorable COVID-related comparison due to year-over-year improvement in procedure volumes as countries continued to open up despite COVID-led disruptions.
Teleflex Incorporated Price, Consensus and EPS Surprise
Teleflex Incorporated price-consensus-eps-surprise-chart | Teleflex Incorporated Quote
Revenues in Asia rose 9.9% reportedly and 6.3% on a CER basis year over year to $75 million. Japan registered robust growth in the third quarter, growing north of 30%, partially offset by the impact of COVID-19 in Southeast Asia.
Segmental Revenues
In the third quarter, the Vascular Access segment reported net revenues of $175.5 million, up 9.7% year over year and 8.5% at CER. The Interventional business registered net revenues of $104.3 million, up 11.9% year over year and 10.4% at CER.
Within the Anesthesia segment, net revenues improved 28.3% year over year and 26.6% at CER to $97.1 million. The Surgical segment recorded net revenues of $92.8 million, reflecting an increase of 12.9% year over year and a 10.9% increase at CER. Revenues of $83.1 million in the Interventional Urology segment rose 1.6% year over year and 1.5% at CER.
Meanwhile, OEM recorded revenue growth of $64.1 million, up 29.8% year over year and 29.4% at CER. The Other product segment’s (consisting of the company’s respiratory products that were not included in the divestiture to Medline, manufacturing service agreement revenues and Urology Care products) net revenues of $83.4 million registered a decline of 3% year over year and 4.3% at CER.
Margins
In the reported quarter, gross profit totaled $387.8 million, up 17.8% year over year. Gross margin expanded 296 basis points (bps) to 55.4%.
Overall, adjusted operating profit was $150.8 million, up 17.4% year over year. Adjusted operating margin saw a 109-bp expansion year over year to 21.5%.
Liquidity Position
Teleflex exited the third quarter of 2021 with cash and cash equivalents of $481.2 million, up from $361.8 million at the end of second-quarter 2021.
Cumulative cash flow provided by operating activities from continuing operations at the end of the third quarter was $450.5 million compared with operating cash flow of $241.5 million in the year-ago period.
The company has a dividend payout ratio of 11% at present.
2021 View
Teleflex has updated its 2021 financial guidance.
The company slashed its full-year GAAP revenue growth projection to the range of 10-11% year over year from the earlier guidance of 10.5-11.75%. The company also reduced its constant currency revenue growth projection for 2021 to the range of 8-9% year over year (from the previously-announced 8.5-9.75% range). Per the company, this realized outlook mirrors the benefits of its diversified portfolio, offset by decreased UroLift revenues from the slower-than-anticipated rebound in elective surgical procedures. The current Zacks Consensus Estimate is pegged at $2.82 billion.
The company currently projects adjusted EPS from continuing operations for 2021 between $13.15 and $13.35 (an improvement from the earlier-expected band of $12.9-$13.1). The Zacks Consensus Estimate for the same is currently pegged at $12.96.
Our Take
Teleflex exited the third quarter of 2021 with better-than-expected results. The year-over-year growth in earnings and revenues looks impressive as well. Geographically, the company’s performance was strong in the Americas, EMEA and Asia despite headwinds from the more lethal Delta variant. Expansion of both margins is another upside. The raised EPS guidance for 2021 buoys optimism.
However, a year-over-year decline in the company’s Other product segment is concerning. Further, a lowered full-year 2021 revenue guidance on reduced UroLift gains does not bode well. Rising operating expenses are other downsides.
Zacks Rank and Key Picks
Teleflex currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and SARTORIUS (SARTF - Free Report) .
Thermo Fisher, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $5.76, which beat the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the consensus mark by 12%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical reported third-quarter 2021 adjusted EPS of $2.06, which surpassed the Zacks Consensus Estimate by 13.2%. Revenues of $706.5 million outpaced the Zacks Consensus Estimate by 3.2%. It currently carries a Zacks Rank #2.
SARTORIUS reported third-quarter 2021 adjusted EPS of $2.55, surpassing the Zacks Consensus Estimate by 7.6%. Revenues of $1.06 billion surpassed the Zacks Consensus Estimate by 5.2%. It currently carries a Zacks Rank #2.