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Avanos Medical (AVNS) Q4 Earnings, Revenues Top Estimates
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Avanos Medical, Inc. (AVNS - Free Report) reported fourth-quarter 2021 adjusted earnings per share (“EPS”) of 46 cents, up 64.3% year over year. The bottom line surpassed the Zacks Consensus Estimate by 15%.
GAAP EPS in the quarter under review was 21 cents against the year-ago quarter’s loss per share of 99 cents.
Full-year adjusted EPS was $1.15, reflecting a 45.6% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 5.5%.
Revenues
Revenues grossed $193.4 million in the reported quarter, up 4.5% year over year. The metric surpassed the Zacks Consensus Estimate by 1.6%.
The top line was primarily driven by continued strong demand for Digestive Health products and improvements in Interventional Pain solutions. However, this was partially offset by lower volume in Respiratory Health products compared to the pandemic-driven demand in the prior year and the expected lower volume in Acute Pain products due to fewer elective procedures.
Full-year revenues were $744.6 million, reflecting a 4.2% improvement from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 0.4%.
Q4 Segmental Analysis
Avanos provides a portfolio of innovative product offerings that focuses on pain management and chronic care.
Pain Management’s net revenues of $67.8 million declined 1.7% on a year-over-year basis due to adverse impacts resulting from the Omicron variant and a slowdown in electives. However, this was partially offset by the introduction of PainBlock Pro, channel partner growth and an expansion into the Ambulatory Surgery Center (“ASC”).
Chronic Care’s net revenues of $125.6 million improved 8.3% year over year partly on the back of double-digit growth in Digestive Health. NeoMed neonatal and pediatric feeding solutions grew 47% from continued conversion to ENFit.
Avanos Medical, Inc. Price, Consensus and EPS Surprise
In the quarter under review, Avanos’ gross profit rose 8.9% to $96.9 million. Gross margin expanded 205 basis points (bps) to 50.1%.
Selling and general expenses fell 8.5% to $75.2 million. Research and development expenses declined 20.8% year over year to $7.6 million. Adjusted operating expenses of $82.8 million decreased 9.8% year over year.
Adjusted operating profit totaled $14.1 million against the prior-year quarter’s adjusted operating loss of $2.9 million.
Financial Update
The company exited full-year 2021 with cash and cash equivalents worth $118.5 million compared with $111.5 million at the end of 2020. Long-term debt at the end of 2021 was $130 million compared with $180 million at the end of 2020.
Cumulative net cash provided by operating activities at the end of full-year 2021 totaled $87.3 million compared with net cash used in operating activities of $2.5 million at the end of full-year 2020.
On Dec 15, 2021, Avanos’ management had approved a share repurchase program, authorizing it to repurchase up to $30 million of the company’s common stock. In the fourth quarter of 2021, Avanos repurchased shares worth $10.7 million, and used the remaining $19.3 million in January 2022 for further repurchases.
Guidance
Avanos has initiated its full-year 2022 outlook.
The company expects its full-year net sales to be in the range of $830-$850 million, reflecting organic growth of 3-6%. The Zacks Consensus Estimate for the same currently stands at $776.9 million.
The company anticipates its full-year 2022 adjusted EPS between $1.55-$1.75. The Zacks Consensus Estimate for the same currently stands at $1.52.
Our Take
Avanos exited the fourth quarter of 2021 with better-than-expected results. Yet, year-over-year decline in the Pain Management segment and lower volume in Respiratory Health products are worrying. Lower elective procedures, which led to expected lower volume in Acute Pain products, are also disappointing. Supply constraints and raw material shortages impacting Avanos’ ability to meet demand within the Game Ready business are concerning as well. Contraction in gross margin remains a woe.
However, strength exhibited by Avanos’ core Chronic Care segment is encouraging. Continued strong demand for Digestive Health products and improvements in Interventional Pain solutions are encouraging. Robust sales of NeoMed are also impressive. Successful launch of next-generation COOLIEF cooled radiofrequency probe kits and CORPAK Standard of Care strategy accelerating CORTRAK hardware sales to record levels in the reported quarter are impressive as well. Introduction of PainBlock Pro and Avanos’ expansion into the ASC are other highlights.
Zacks Rank and Stocks to Consider
Avanos currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. (AMN - Free Report) , GlaxoSmithKline plc (GSK - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2021 adjusted EPS of $2.95, which beat the Zacks Consensus Estimate by 14.3%. Revenues of $1.36 billion outpaced the consensus mark by 0.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20%.
GlaxoSmithKline, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%.
GlaxoSmithKline has an estimated long-term growth rate of 6.8%. GSK’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 20.5%.
Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #1.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%.
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Avanos Medical (AVNS) Q4 Earnings, Revenues Top Estimates
Avanos Medical, Inc. (AVNS - Free Report) reported fourth-quarter 2021 adjusted earnings per share (“EPS”) of 46 cents, up 64.3% year over year. The bottom line surpassed the Zacks Consensus Estimate by 15%.
GAAP EPS in the quarter under review was 21 cents against the year-ago quarter’s loss per share of 99 cents.
Full-year adjusted EPS was $1.15, reflecting a 45.6% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 5.5%.
Revenues
Revenues grossed $193.4 million in the reported quarter, up 4.5% year over year. The metric surpassed the Zacks Consensus Estimate by 1.6%.
The top line was primarily driven by continued strong demand for Digestive Health products and improvements in Interventional Pain solutions. However, this was partially offset by lower volume in Respiratory Health products compared to the pandemic-driven demand in the prior year and the expected lower volume in Acute Pain products due to fewer elective procedures.
Full-year revenues were $744.6 million, reflecting a 4.2% improvement from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 0.4%.
Q4 Segmental Analysis
Avanos provides a portfolio of innovative product offerings that focuses on pain management and chronic care.
Pain Management’s net revenues of $67.8 million declined 1.7% on a year-over-year basis due to adverse impacts resulting from the Omicron variant and a slowdown in electives. However, this was partially offset by the introduction of PainBlock Pro, channel partner growth and an expansion into the Ambulatory Surgery Center (“ASC”).
Chronic Care’s net revenues of $125.6 million improved 8.3% year over year partly on the back of double-digit growth in Digestive Health. NeoMed neonatal and pediatric feeding solutions grew 47% from continued conversion to ENFit.
Avanos Medical, Inc. Price, Consensus and EPS Surprise
Avanos Medical, Inc. price-consensus-eps-surprise-chart | Avanos Medical, Inc. Quote
Margin Analysis
In the quarter under review, Avanos’ gross profit rose 8.9% to $96.9 million. Gross margin expanded 205 basis points (bps) to 50.1%.
Selling and general expenses fell 8.5% to $75.2 million. Research and development expenses declined 20.8% year over year to $7.6 million. Adjusted operating expenses of $82.8 million decreased 9.8% year over year.
Adjusted operating profit totaled $14.1 million against the prior-year quarter’s adjusted operating loss of $2.9 million.
Financial Update
The company exited full-year 2021 with cash and cash equivalents worth $118.5 million compared with $111.5 million at the end of 2020. Long-term debt at the end of 2021 was $130 million compared with $180 million at the end of 2020.
Cumulative net cash provided by operating activities at the end of full-year 2021 totaled $87.3 million compared with net cash used in operating activities of $2.5 million at the end of full-year 2020.
On Dec 15, 2021, Avanos’ management had approved a share repurchase program, authorizing it to repurchase up to $30 million of the company’s common stock. In the fourth quarter of 2021, Avanos repurchased shares worth $10.7 million, and used the remaining $19.3 million in January 2022 for further repurchases.
Guidance
Avanos has initiated its full-year 2022 outlook.
The company expects its full-year net sales to be in the range of $830-$850 million, reflecting organic growth of 3-6%. The Zacks Consensus Estimate for the same currently stands at $776.9 million.
The company anticipates its full-year 2022 adjusted EPS between $1.55-$1.75. The Zacks Consensus Estimate for the same currently stands at $1.52.
Our Take
Avanos exited the fourth quarter of 2021 with better-than-expected results. Yet, year-over-year decline in the Pain Management segment and lower volume in Respiratory Health products are worrying. Lower elective procedures, which led to expected lower volume in Acute Pain products, are also disappointing. Supply constraints and raw material shortages impacting Avanos’ ability to meet demand within the Game Ready business are concerning as well. Contraction in gross margin remains a woe.
However, strength exhibited by Avanos’ core Chronic Care segment is encouraging. Continued strong demand for Digestive Health products and improvements in Interventional Pain solutions are encouraging. Robust sales of NeoMed are also impressive. Successful launch of next-generation COOLIEF cooled radiofrequency probe kits and CORPAK Standard of Care strategy accelerating CORTRAK hardware sales to record levels in the reported quarter are impressive as well. Introduction of PainBlock Pro and Avanos’ expansion into the ASC are other highlights.
Zacks Rank and Stocks to Consider
Avanos currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are AMN Healthcare Services, Inc. (AMN - Free Report) , GlaxoSmithKline plc (GSK - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2021 adjusted EPS of $2.95, which beat the Zacks Consensus Estimate by 14.3%. Revenues of $1.36 billion outpaced the consensus mark by 0.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20%.
GlaxoSmithKline, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%.
GlaxoSmithKline has an estimated long-term growth rate of 6.8%. GSK’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 20.5%.
Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #1.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%.