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Teleflex (TFX) Q3 Earnings Top Estimates, Adjusted EPS View Cut
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Teleflex Incorporated’s (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $3.27 for the third quarter of 2022 dropped 6.8% from the year-ago figure. However, it topped the Zacks Consensus Estimate by 5.5%.
GAAP EPS of $2.16 for the third quarter showed a 48.6% plunge from the year-ago figure.
Revenues in Detail
Net revenues in the third quarter dropped 1.9% year over year to $686.8 million but were up 2.4% on a constant exchange rate or CER. The top line lagged the Zacks Consensus Estimate by 0.7%.
Americas’ net revenues of $405.1 million fell 2.9% from the year-ago period and declined 2.7% at CER due to a tough year-over-year comparison. In the quarter, lower revenues from the manufacturing supply and transition agreement associated with the company’s prior divestiture of the Respiratory assets negatively impacted Americas’ growth by 2.1%, reflecting a flat underlying performance for the quarter.
Teleflex Incorporated Price, Consensus and EPS Surprise
EMEA net revenues of $128.4 million declined 10.7% year over year but improved 3.4% at CER. The company continued to see procedure volumes improvement on a year-over-year basis.
Revenues from Asia rose 20.5% at CER to $82 million, backed by strong contributions from growth in all geographies.
Segmental Revenues
In the third quarter, the Vascular Access segment reported net revenues of $167.1 million, down 0.8% at CER. The Interventional business registered net revenues of $108.7 million, up 8.9% at CER.
Within the Anesthesia segment, net revenues improved 5.8% at CER to $97.6 million. The Surgical segment recorded net revenues of $93.1 million, reflecting an increase of 6.2% year over year at CER. Revenues of $79 million in the Interventional Urology segment declined 4.6% at CER.
Meanwhile, OEM recorded revenue growth of $71.3 million, up 14.4% 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 $69.9 million registered a decline of 9.9% year over year at CER.
Margins
In the reported quarter, gross profit totaled $373.9 million, down 3.6% year over year. The gross margin contracted 93 basis points (bps) to 54.5%.
Overall, the adjusted operating profit was $126.6 million, down 16.1% year over year. Adjusted operating margin saw a 310-bp contraction year over year to 18.4%.
Liquidity Position
Teleflex exited 2022 with cash and cash equivalents of $397.3 million, up from $308.1 million at the end of Q2.
Cumulative cash flow provided by operating activities from continuing operations at the end of the third quarter of 2022 was $244.4 million compared with $450.5 million in the year-ago period.
GAAP revenue growth for 2022 is now expected in the range of (0.75%) to 0.25%, a reduction from the earlier-provided band of (0.45%) to 0.55%. The company reiterated its constant currency revenue growth expectation for 2022 in the band of 3.25% to 4.25%. The current Zacks Consensus Estimate for total revenues is pegged at $2.81 billion.
The company lowered its adjusted EPS from continuing operations projection for 2022 to $12.80 to $13.20 (the earlier band was $13.00 to $13.40), suggesting a decline of 1-4% from the comparable reported figure in 2021. The Zacks Consensus Estimate for the same is currently pegged at $13.06.
Our Take
Teleflex exited the third quarter of 2022 on a mixed note. While earnings were better than expected, revenues fell short of estimates. The company exhibited a year-over-year decline across the Americas while EMEA and Asia regions grew at CER.
Teleflex’s lowered GAAP revenue and adjusted EPS outlook for 2022, indicating lackluster performance in the coming period, increased investors’ concern. For UroLift, the company currently assumes 2022 revenue to be roughly $320 million, down from the prior guidance of $335 million.
Zacks Rank and Key Picks
Teleflex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 10.5%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Teleflex (TFX) Q3 Earnings Top Estimates, Adjusted EPS View Cut
Teleflex Incorporated’s (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $3.27 for the third quarter of 2022 dropped 6.8% from the year-ago figure. However, it topped the Zacks Consensus Estimate by 5.5%.
GAAP EPS of $2.16 for the third quarter showed a 48.6% plunge from the year-ago figure.
Revenues in Detail
Net revenues in the third quarter dropped 1.9% year over year to $686.8 million but were up 2.4% on a constant exchange rate or CER. The top line lagged the Zacks Consensus Estimate by 0.7%.
Americas’ net revenues of $405.1 million fell 2.9% from the year-ago period and declined 2.7% at CER due to a tough year-over-year comparison. In the quarter, lower revenues from the manufacturing supply and transition agreement associated with the company’s prior divestiture of the Respiratory assets negatively impacted Americas’ growth by 2.1%, reflecting a flat underlying performance for the quarter.
Teleflex Incorporated Price, Consensus and EPS Surprise
Teleflex Incorporated price-consensus-eps-surprise-chart | Teleflex Incorporated Quote
EMEA net revenues of $128.4 million declined 10.7% year over year but improved 3.4% at CER. The company continued to see procedure volumes improvement on a year-over-year basis.
Revenues from Asia rose 20.5% at CER to $82 million, backed by strong contributions from growth in all geographies.
Segmental Revenues
In the third quarter, the Vascular Access segment reported net revenues of $167.1 million, down 0.8% at CER. The Interventional business registered net revenues of $108.7 million, up 8.9% at CER.
Within the Anesthesia segment, net revenues improved 5.8% at CER to $97.6 million. The Surgical segment recorded net revenues of $93.1 million, reflecting an increase of 6.2% year over year at CER. Revenues of $79 million in the Interventional Urology segment declined 4.6% at CER.
Meanwhile, OEM recorded revenue growth of $71.3 million, up 14.4% 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 $69.9 million registered a decline of 9.9% year over year at CER.
Margins
In the reported quarter, gross profit totaled $373.9 million, down 3.6% year over year. The gross margin contracted 93 basis points (bps) to 54.5%.
Overall, the adjusted operating profit was $126.6 million, down 16.1% year over year. Adjusted operating margin saw a 310-bp contraction year over year to 18.4%.
Liquidity Position
Teleflex exited 2022 with cash and cash equivalents of $397.3 million, up from $308.1 million at the end of Q2.
Cumulative cash flow provided by operating activities from continuing operations at the end of the third quarter of 2022 was $244.4 million compared with $450.5 million in the year-ago period.
The company has a dividend payout ratioof 10% at present.
2022 View
Teleflex updated its 2022 financial guidance.
GAAP revenue growth for 2022 is now expected in the range of (0.75%) to 0.25%, a reduction from the earlier-provided band of (0.45%) to 0.55%. The company reiterated its constant currency revenue growth expectation for 2022 in the band of 3.25% to 4.25%. The current Zacks Consensus Estimate for total revenues is pegged at $2.81 billion.
The company lowered its adjusted EPS from continuing operations projection for 2022 to $12.80 to $13.20 (the earlier band was $13.00 to $13.40), suggesting a decline of 1-4% from the comparable reported figure in 2021. The Zacks Consensus Estimate for the same is currently pegged at $13.06.
Our Take
Teleflex exited the third quarter of 2022 on a mixed note. While earnings were better than expected, revenues fell short of estimates. The company exhibited a year-over-year decline across the Americas while EMEA and Asia regions grew at CER.
Teleflex’s lowered GAAP revenue and adjusted EPS outlook for 2022, indicating lackluster performance in the coming period, increased investors’ concern. For UroLift, the company currently assumes 2022 revenue to be roughly $320 million, down from the prior guidance of $335 million.
Zacks Rank and Key Picks
Teleflex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Elevance Health Inc. (ELV - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
Elevance Health, carrying a Zacks Rank #2 (Buy), reported third-quarter 2022 adjusted EPS of $7.53, which beat the Zacks Consensus Estimate by 6.1%. Revenues of $39.63 billion outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Elevance Health has an estimated long-term growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average being 4.1%.
Medpace Holdings, sporting a Zacks Rank #1, reported third-quarter 2022 EPS of $2.05, which beat the Zacks Consensus Estimate by 39.5%. Revenues of $383.7 million outpaced the consensus mark by 8.1%.
Medpace Holdings has an estimated growth rate of 44.9% for the full-year 2022. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average being 22%.
Merit Medical, flaunting a Zacks Rank #1, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 10.5%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.