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Glaukos (GKOS) Q2 Earnings Miss Estimates, Revenues Beat

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Glaukos Corporation (GKOS - Free Report) reported an adjusted loss per share of 83 cents for the second quarter of 2022, wider than the adjusted loss of 22 cents reported in the year-ago quarter as well as the Zacks Consensus Estimate of a loss of 44 cents. The significant widening of loss was due to lower revenues as well as higher operating and non-operating expenses.

GAAP earnings per share (“EPS”) for the quarter were 96 cents against a loss of 38 cents per share in the year-ago period.

Revenues in Detail

Glaukos registered revenues of $72.7 million in the second quarter, down 6.9% year over year on a reported basis. The figure, however, surpassed the Zacks Consensus Estimate by 7.5%.

Quarter in Details

In the quarter under review, Glaukos recorded Glaucoma net sales of $56.1 million and Corneal Health net sales of $16.6 million.

Glaukos Corporation Price, Consensus and EPS Surprise

Glaukos Corporation Price, Consensus and EPS Surprise

Glaukos Corporation price-consensus-eps-surprise-chart | Glaukos Corporation Quote

Margin Trend

In the quarter under review, Glaukos’ gross profit rose 16.9% to $73.5 million. Gross margin contracted approximately 200 basis points (bps) to 75%.

Selling, general and administrative expenses rose 10% to $49.9 million. Research and development expenses went up 31% year over year to $31.7 million. Total operating expenses of $70.8 million increased 12.2% year over year.

Operating loss in the reported quarter totaled $91.6 million compared with a total operating loss of $74.6 million in the year-ago quarter.

Financial Update

Glaukos exited second-quarter 2022 with cash and cash equivalents, and short-term investments of $391.2 million compared with $415.4 million at the end of the first quarter.

2022 Guidance

Glaukos raised the upper range of its revenue outlook for the full year based on solid execution globally and better-than-expected revenues.

For 2022, Glaukos now expects net sales between $270 million and $280 million, compared with the previous projection of net sales between $270 million and $275 million. The Zacks Consensus Estimate for the same stands at $273.37 million.

Our Take

Glaukos exited the second quarter of 2022 with mixed results, wherein earnings missed estimates but revenues beat the same.

It launched iPrime — a new disco elastic delivery device — in the latter part of the second quarter. In the latter part of the first quarter, the company had launched the iAccess device for go anatomy procedures. The addition of these new devices will provide unique solutions designed to grow and improve treatment options for surgeons, customers and patients. The company’s iAccess device has positive market feedback.

In a separate press release, Glaukos announced that it received the FDA 510(K) clearance for iStent infinite — the first FDA-cleared micro-invasive implantable device used as a standalone treatment option for glaucoma patients to reduce elevated intraocular pressure. The potential launch of the product, expected later this year, will likely accelerate Glaucoma net sales growth going forward. The company is also developing several other treatment options in its pipeline. These developments raise our optimism about the stock.

However, wider adjusted loss per share and lower overall revenues on a year-over-year basis are disappointing. Glaukos incurred an operating loss in the reported quarter, raising our apprehension. The company’s operation in a stiff competitive space is also worrying.

Zacks Rank and Other Key Picks

Currently, Glaukos carries a Zacks Rank #2 (Buy).

Some other top-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. 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 60 days. LNTH stock has surged 162.7% 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 60 days. SWAV has gained 23.2% 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 loss of 17 cents to earnings of 20 cents for 2022 and from 31 cents to 33 cents for 2023 in the past 60 days. ALKS has gained 8.9% so far this year.

Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.