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NuVasive, Inc. delivered adjusted earnings per share (EPS) of 54 cents for third-quarter 2022, up 68.8% year over year. The figure beat the Zacks Consensus Estimate by 1.9%.
The one-time adjustments include expenses associated with certain business transition costs and European medical device regulation, among others.
GAAP loss per share of 4 cents compared favorably with the year-ago loss of 42 cents.
Total Revenues
Revenues in the third quarter totaled $295.3 million, up 9% year over year on a reported basis and 12.9% at a constant exchange rate or CER. The top line, however, missed the Zacks Consensus Estimate by 0.8%.
Third-quarter revenue growth was driven by continued positive momentum from the adoption of new products, higher procedural volumes in the United States and strong international performance.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 12.7% year over year to $163.5 million on continued growth in the Simplify Cervical Disc and C360 portfolios.
Revenues from the U.S. Surgical Support business were $63 million in the third quarter, up 4.2% year over year. Growth was partially offset by a decline in Biologics, which was due to fewer stocking orders as well as shifts in procedure volume toward cervical cases.
International net sales for the third quarter were $68.8 million, representing growth of 5.3% year over year (up 21.3% at CER).
Margin Details
In the reported quarter, gross profit rose 17.7% year over year to $214.7 million. The gross margin expanded 534 basis points (bps) to 72.6%.
Selling, general and administrative expenses climbed 5.4% year over year to $154 million, whereas research and development (R&D) expenses rose 1.1% year over year to $23.7 million.
Overall adjusted operating profit was $36.7 million, a huge improvement from the year-ago figure of $12.7 million. Adjusted operating margin saw a 774-bp expansion year over year to 12.4%.
Financial Details
The company exited the third quarter of 2022 with cash and cash equivalents of $237.5 million, compared with $225.9 million at the end of the second quarter of 2022.
Cumulative net cash provided by operating activities at the end of the quarter was $122.3 million compared with the prior-year period’s $144.8 million.
2022 Guidance
NuVasive has updated its guidance for full-year 2022.
The company expects revenue growth in the range of 5.5-6.5% on a reported basis (down from the previous range of 6-8%) and 8.7-9.7% at CER (narrowed from the prior projection of 8.7-10.7%). The Zacks Consensus Estimate for revenues is pegged at $1.21 billion.
The company expects its adjusted EPS guidance in the band of $2.00-$2.10 (down from $2.15-$2.45 expected earlier). The Zacks Consensus Estimate for the same is pegged at $2.09.
The company has reduced its adjusted operating margin guidance to the range of 12.3%-13.0% (13.0-14.5% previously).
Our Take
NuVasive exited the third quarter of 2022 with earnings beating the Zacks Consensus Estimate. Strong sales performance across the U.S. Spinal Hardware and U.S. Surgical Support businesses instill optimism. Robust international performance is encouraging. The continued demand for the Simplified Cervical Disc and the Pulse platforms is also encouraging. The expansion of both margins is an upside.
However, revenue for the quarter under review missed the consensus mark. The company’s performance continues to be challenged by inflationary costs, supply chain disruptions, volatility in foreign exchange rates and the persistent COVID-led impact. The reduced 2022 guidance signals the continuation of this gloomy scenario.
Zacks Rank and Key Picks
NuVasive currently carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for ShockWave Medical’s earnings per share is stable at $2.57 for 2022 and rose from $3.42 to $3.56 for 2023 in the past 60 days. SWAV has gained 43.1% so far this year.
ShockWave Medical delivered an earnings surprise of 146.1%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN has declined 1.6% so far this year.
AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.
McKesson’s earnings per share estimates have increased from $24.42 to $24.75 for fiscal 2023 and $26.04 to $26.40 for fiscal 2024 in the past 60 days. MCK has gained 55.2% so far this year.
McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.
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NuVasive (NUVA) Q3 Earnings Beat Estimates, Guidance Cut
NuVasive, Inc. delivered adjusted earnings per share (EPS) of 54 cents for third-quarter 2022, up 68.8% year over year. The figure beat the Zacks Consensus Estimate by 1.9%.
The one-time adjustments include expenses associated with certain business transition costs and European medical device regulation, among others.
GAAP loss per share of 4 cents compared favorably with the year-ago loss of 42 cents.
Total Revenues
Revenues in the third quarter totaled $295.3 million, up 9% year over year on a reported basis and 12.9% at a constant exchange rate or CER. The top line, however, missed the Zacks Consensus Estimate by 0.8%.
NuVasive, Inc. Price, Consensus and EPS Surprise
NuVasive, Inc. price-consensus-eps-surprise-chart | NuVasive, Inc. Quote
Third-quarter revenue growth was driven by continued positive momentum from the adoption of new products, higher procedural volumes in the United States and strong international performance.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 12.7% year over year to $163.5 million on continued growth in the Simplify Cervical Disc and C360 portfolios.
Revenues from the U.S. Surgical Support business were $63 million in the third quarter, up 4.2% year over year. Growth was partially offset by a decline in Biologics, which was due to fewer stocking orders as well as shifts in procedure volume toward cervical cases.
International net sales for the third quarter were $68.8 million, representing growth of 5.3% year over year (up 21.3% at CER).
Margin Details
In the reported quarter, gross profit rose 17.7% year over year to $214.7 million. The gross margin expanded 534 basis points (bps) to 72.6%.
Selling, general and administrative expenses climbed 5.4% year over year to $154 million, whereas research and development (R&D) expenses rose 1.1% year over year to $23.7 million.
Overall adjusted operating profit was $36.7 million, a huge improvement from the year-ago figure of $12.7 million. Adjusted operating margin saw a 774-bp expansion year over year to 12.4%.
Financial Details
The company exited the third quarter of 2022 with cash and cash equivalents of $237.5 million, compared with $225.9 million at the end of the second quarter of 2022.
Cumulative net cash provided by operating activities at the end of the quarter was $122.3 million compared with the prior-year period’s $144.8 million.
2022 Guidance
NuVasive has updated its guidance for full-year 2022.
The company expects revenue growth in the range of 5.5-6.5% on a reported basis (down from the previous range of 6-8%) and 8.7-9.7% at CER (narrowed from the prior projection of 8.7-10.7%). The Zacks Consensus Estimate for revenues is pegged at $1.21 billion.
The company expects its adjusted EPS guidance in the band of $2.00-$2.10 (down from $2.15-$2.45 expected earlier). The Zacks Consensus Estimate for the same is pegged at $2.09.
The company has reduced its adjusted operating margin guidance to the range of 12.3%-13.0% (13.0-14.5% previously).
Our Take
NuVasive exited the third quarter of 2022 with earnings beating the Zacks Consensus Estimate. Strong sales performance across the U.S. Spinal Hardware and U.S. Surgical Support businesses instill optimism. Robust international performance is encouraging. The continued demand for the Simplified Cervical Disc and the Pulse platforms is also encouraging. The expansion of both margins is an upside.
However, revenue for the quarter under review missed the consensus mark. The company’s performance continues to be challenged by inflationary costs, supply chain disruptions, volatility in foreign exchange rates and the persistent COVID-led impact. The reduced 2022 guidance signals the continuation of this gloomy scenario.
Zacks Rank and Key Picks
NuVasive currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space are ShockWave Medical (SWAV - Free Report) , AMN Healthcare Services (AMN - Free Report) and McKesson (MCK - Free Report) , all carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ShockWave Medical’s earnings per share is stable at $2.57 for 2022 and rose from $3.42 to $3.56 for 2023 in the past 60 days. SWAV has gained 43.1% so far this year.
ShockWave Medical delivered an earnings surprise of 146.1%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN has declined 1.6% so far this year.
AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.
McKesson’s earnings per share estimates have increased from $24.42 to $24.75 for fiscal 2023 and $26.04 to $26.40 for fiscal 2024 in the past 60 days. MCK has gained 55.2% so far this year.
McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.