We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CONMED (CNMD) Down on In-Line Q2 Earnings & Lower 2022 View
Read MoreHide Full Article
CONMED Corporation (CNMD - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of 76 cents, which matched the Zacks Consensus Estimate. The bottom line rose 7% from the year-ago quarter.
GAAP EPS for the quarter was a loss of $5.41 against earnings of 41 cents per share in the year-ago quarter. The significant decline in GAAP EPS was primarily due to the extinguishment of most of the 2024 convertible notes.
Revenues in Detail
CONMED’s second-quarter revenues were $277.2 million, up 8.6% year over year. The top line outpaced the Zacks Consensus Estimate by 1.2%.
At the constant exchange rate (CER), revenues increased 9.8%.
CONMED Corporation Price, Consensus and EPS Surprise
Revenues at the Orthopedic Surgery segment totaled $120.2 million, up 11.4% from the year-ago quarter on a reported basis. At CER, revenues increased 12.7%.
Orthopedics revenues declined 0.8% on a reported basis on the domestic front while gaining 18.8% (up 20.7% at CER) from the prior-year levels on the international front.
Revenues at the General Surgery segment amounted to $157 million, up 6.6% year over year on a reported basis and 7.7% at CER.
Domestically, General Surgery sales increased 5.7% year over year, while international sales advanced 8.6% on a reported basis (up 12% at CER).
Sales by Geography
In the reported quarter, sales in the United States amounted to $149.2 million, up 3.9% year over year. International sales were $128 million, up 14.7% year over year on a reported basis and 17.2% at CER.
Margins
In the quarter under review, CONMED’s gross profit rose 7.3% to $151.8 million. The gross margin declined 60 basis points (bps) to 54.8%. The gross margin was hurt by ongoing inflationary or supply chain challenges.
Selling & administrative expenses increased 10.9% to $115.8 million. Research and development expenses rose 1.5% year over year to $11.5 million.
Operating profit totaled $24.5 million, reflecting a decline of 4.9% from the prior-year quarter. The operating margin declined 130 bps to 8.8%.
2022 Guidance Revised
CONMED lowered its guidance for revenues and adjusted earnings in 2022, reflecting the anticipated negative impact of foreign currency movement.
The company now projects full-year 2022 revenues in the range of $1.095 billion to $1.14 billion (down from the previously guided range of $1.11 billion to $1.15 billion). The Zacks Consensus Estimate is currently pegged at $1.12 billion.
Adjusted EPS for the full year is now expected in the range of $3.40 to $3.55 (down from the previously projected band of $3.50 to $3.65). The Zacks Consensus Estimate currently stands at $3.51.
Shares of CONMED were down 8.6% during after-hours trading on Jul 27, following the weaker guidance for 2022. The company’s shares have declined 26.7% so far this year compared with the industry’s decrease of 14.4%.
Image Source: Zacks Investment Research
Our Take
CONMED exited the second quarter with a strong segmental performance. While earnings met the Zacks Consensus Estimate, revenues beat the same. The company witnessed strong performances across its Orthopedic and General Surgery units. It saw sales growth in both its domestic and overseas markets. Expansion of both gross and operating margins bodes well for the stock.
Meanwhile, the continued inflationary and supply chain challenges in the second quarter do not augur well. The unfavorable currency movement is expected to have a negative impact of 100 to 150 bps on full-year revenue growth. CONMED operates in a highly competitive environment, especially with respect to the General Surgery business, which raises further apprehension.
Estimates for Lantheus have improved from earnings of $3.04 to $3.08 for 2022 and $3.33 to $3.62 for 2023 in the past 30 days. LNTH has surged 156.6% so far this year.
Lantheus delivered an earnings surprise of 77.82%, on average, in the last four quarters.
ShockWave Medical’s earnings per share estimates have improved from $1.84 to $2.02 for 2022 and from $2.82 to $2.95 for 2023 in the past 30 days. SWAV has declined 19.1% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
Alkermes’ earnings per share estimates have improved from breakeven to 4 cents for 2022 and from 56 cents to 59 cents for 2023 in the past 30 days. ALKS has gained 19.6% so far this year.
Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
CONMED (CNMD) Down on In-Line Q2 Earnings & Lower 2022 View
CONMED Corporation (CNMD - Free Report) reported second-quarter 2022 adjusted earnings per share (EPS) of 76 cents, which matched the Zacks Consensus Estimate. The bottom line rose 7% from the year-ago quarter.
GAAP EPS for the quarter was a loss of $5.41 against earnings of 41 cents per share in the year-ago quarter. The significant decline in GAAP EPS was primarily due to the extinguishment of most of the 2024 convertible notes.
Revenues in Detail
CONMED’s second-quarter revenues were $277.2 million, up 8.6% year over year. The top line outpaced the Zacks Consensus Estimate by 1.2%.
At the constant exchange rate (CER), revenues increased 9.8%.
CONMED Corporation Price, Consensus and EPS Surprise
CONMED Corporation price-consensus-eps-surprise-chart | CONMED Corporation Quote
Segment Details
Revenues at the Orthopedic Surgery segment totaled $120.2 million, up 11.4% from the year-ago quarter on a reported basis. At CER, revenues increased 12.7%.
Orthopedics revenues declined 0.8% on a reported basis on the domestic front while gaining 18.8% (up 20.7% at CER) from the prior-year levels on the international front.
Revenues at the General Surgery segment amounted to $157 million, up 6.6% year over year on a reported basis and 7.7% at CER.
Domestically, General Surgery sales increased 5.7% year over year, while international sales advanced 8.6% on a reported basis (up 12% at CER).
Sales by Geography
In the reported quarter, sales in the United States amounted to $149.2 million, up 3.9% year over year. International sales were $128 million, up 14.7% year over year on a reported basis and 17.2% at CER.
Margins
In the quarter under review, CONMED’s gross profit rose 7.3% to $151.8 million. The gross margin declined 60 basis points (bps) to 54.8%. The gross margin was hurt by ongoing inflationary or supply chain challenges.
Selling & administrative expenses increased 10.9% to $115.8 million. Research and development expenses rose 1.5% year over year to $11.5 million.
Operating profit totaled $24.5 million, reflecting a decline of 4.9% from the prior-year quarter. The operating margin declined 130 bps to 8.8%.
2022 Guidance Revised
CONMED lowered its guidance for revenues and adjusted earnings in 2022, reflecting the anticipated negative impact of foreign currency movement.
The company now projects full-year 2022 revenues in the range of $1.095 billion to $1.14 billion (down from the previously guided range of $1.11 billion to $1.15 billion). The Zacks Consensus Estimate is currently pegged at $1.12 billion.
Adjusted EPS for the full year is now expected in the range of $3.40 to $3.55 (down from the previously projected band of $3.50 to $3.65). The Zacks Consensus Estimate currently stands at $3.51.
Shares of CONMED were down 8.6% during after-hours trading on Jul 27, following the weaker guidance for 2022. The company’s shares have declined 26.7% so far this year compared with the industry’s decrease of 14.4%.
Image Source: Zacks Investment Research
Our Take
CONMED exited the second quarter with a strong segmental performance. While earnings met the Zacks Consensus Estimate, revenues beat the same. The company witnessed strong performances across its Orthopedic and General Surgery units. It saw sales growth in both its domestic and overseas markets. Expansion of both gross and operating margins bodes well for the stock.
Meanwhile, the continued inflationary and supply chain challenges in the second quarter do not augur well. The unfavorable currency movement is expected to have a negative impact of 100 to 150 bps on full-year revenue growth. CONMED operates in a highly competitive environment, especially with respect to the General Surgery business, which raises further apprehension.
Zacks Rank and Stocks to Consider
Currently, CONMED carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the pharma/biotech sector include Lantheus (LNTH - Free Report) , ShockWave Medical (SWAV - Free Report) and Alkermes (ALKS - Free Report) . While Lantheus and ShockWave Medical sport a Zacks Rank #1 (Strong Buy), Alkermes carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Lantheus have improved from earnings of $3.04 to $3.08 for 2022 and $3.33 to $3.62 for 2023 in the past 30 days. LNTH has surged 156.6% so far this year.
Lantheus delivered an earnings surprise of 77.82%, on average, in the last four quarters.
ShockWave Medical’s earnings per share estimates have improved from $1.84 to $2.02 for 2022 and from $2.82 to $2.95 for 2023 in the past 30 days. SWAV has declined 19.1% so far this year.
ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.
Alkermes’ earnings per share estimates have improved from breakeven to 4 cents for 2022 and from 56 cents to 59 cents for 2023 in the past 30 days. ALKS has gained 19.6% so far this year.
Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.