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Globus Medical (GMED) Q4 Earnings Beat, Operating Margin Rises
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Globus Medical, Inc. (GMED - Free Report) reported adjusted earnings per share (EPS) of 59 cents in the fourth-quarter of 2022, beating the Zacks Consensus Estimate by 7.3%. The metric also surpassed the year-ago adjusted EPS by 20.4%.
The adjusted EPS excludes certain non-recurring expenses like the amortization of intangibles and acquisition-related costs/licensing.
Without adjustments, the company registered a GAAP EPS of 49 cents. The figure remarkably increased from the year-ago GAAP EPS of 14 cents.
For the full year, adjusted earnings were $2.06 per share, 0.9% up from the year-ago period. It also beat the Zacks Consensus Estimate by 1.5%.
Revenues
Worldwide sales in the quarter under review totaled $274.5 million, up 9.8% year over year (increased 11.7% at Constant Exchange Rate). However, the reported figure missed the Zacks Consensus Estimate by 1%.
Full-year revenues were $1.02 billion, reflecting a 6.8% increase from the year-ago period (up 8.2% at CER). However, it missed the Zacks Consensus Estimate by 0.9%.
Quarterly Details
During the quarter under review, sales generated in the United States, increased 9.5% year over year at CER to $233.2 million. Internationally, revenues increased 11.4% to $41.3 million, up 24.2% year over year at CER.
Through its product category, Musculoskeletal Solutions generated revenues of $244.9 million, up 9.1% year over year.
Enabling Technologies product revenues of $29.5 million in the quarter improved 16.2% from the prior-year figure (up 20% at CER). Since the launch of this product, Globus delivered its highest quarter, driven by robotics and system imaging sales.
Margin
The gross profit in the reported quarter rose 8.3% year over year to $203.9 million. However, the gross margin contracted 100 basis points (bps) to 74.3% due to a product mix and higher freight costs.
SG&A expenses in the reported quarter were $118.1 million, up 10.8% from the year-ago quarter. The increase was primarily in the higher selling cost due to high compensation expenses from recruiting and mounting traveling expenses. Research and development expenses decreased 61.8% to $19.5 million.
The quarter’s adjusted operating profit rose massively to $66.3 million compared with $30.64 million in the year-ago quarter. The adjusted operating margin expanded 1191 bps in the quarter to 24.2%.
Cash Position
Globus Medical exited 2022 with cash and cash equivalents, and short-term marketable securities of $446.1 million compared with $443.4 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of 2022 was $178.5 million compared with the year-ago figure of $276.3 million.
On Feb 9, 2023, the company announced its plans to acquire the San-Diego based spine technology firm, NuVasive Inc., in an all-stock deal valued at around $3.1 billion. The transaction, which is expected to close in mid-2023, reflects both companies’ vision to improve patient care through innovation in unmet clinical needs.
2023 Guidance
With the planned purchase in the picture, Globus Medical only provided its stand-alone guidance for the full-year 2023.
Full-year net sales are projected at $1.1 billion, indicating 7.5% growth compared with the previous year. The Zacks Consensus Estimate for the same is currently pegged at $1.12 billion.
The company’s adjusted EPS guidance for 2023 is pegged at $2.30, suggesting 11.7% growth compared to 2022. The Zacks Consensus Estimate for the same is pegged at $2.31 currently.
Our Take
Globus Medical exited the fourth quarter of 2022 with an earnings beat and revenue miss. Robust growth of organic revenues in both the United States and international market is impressive. Rapid market interest and customer demand have positioned Excelsius3D, the company’s latest addition to the Excelsius Ecosystem, as a major growth driver in 2023.
The company delivered its 12th consecutive quarter of sequential growth in the Trauma business, with 70% growth in the reported quarter. Internationally (excluding Japan), Globus’ spinal implant business also delivered double-digit growth in most markets.
Higher net sales and the acquisition of in-process research and development contributed to the quarter’s GAAP net income, which increased 231.4% from the prior year’s quarter figure. With the complementary strengths of Globus engineering and NuVasive relations, education and training, GMED aims to outpace market growth, leading to accelerated EPS growth and an increase in cash flows for investors.
Globus Medical, Inc. (GMED - Free Report) reported adjusted earnings per share (EPS) of 59 cents in the fourth quarter of 2022, beating the Zacks Consensus Estimate by 7.3%. The metric also surpassed the year-ago adjusted EPS by 20.4%.
The adjusted EPS excludes certain non-recurring expenses like the amortization of intangibles and acquisition-related costs/licensing.
Without adjustments, the company registered a GAAP EPS of 49 cents. The figure remarkably increased from the year-ago GAAP EPS of 14 cents.
For the full year, adjusted earnings were $2.06 per share, 0.9% up from the year-ago period. It also beat the Zacks Consensus Estimate by 1.5%.
Revenues
Worldwide sales in the quarter under review totaled $274.5 million, up 9.8% year over year (increased 11.7% at Constant Exchange Rate). However, the reported figure missed the Zacks Consensus Estimate by 1%.
Full-year revenues were $1.02 billion, reflecting a 6.8% increase from the year-ago period (up 8.2% at CER). However, it missed the Zacks Consensus Estimate by 0.9%.
Quarterly Details
During the quarter under review, sales generated in the United States, increased 9.5% year over year at CER to $233.2 million. Internationally, revenues increased 11.4% to $41.3 million, up 24.2% year over year at CER.
Globus Medical, Inc. Price, Consensus and EPS Surprise
Through its product category, Musculoskeletal Solutions generated revenues of $244.9 million, up 9.1% year over year.
Enabling Technologies' product revenues of $29.5 million in the quarter improved 16.2% from the prior-year figure (up 20% at CER). Since the launch of this product, Globus delivered its highest quarter, driven by robotics and system imaging sales.
Margin
The gross profit in the reported quarter rose 8.3% year over year to $203.9 million. However, the gross margin contracted 100 basis points (bps) to 74.3% due to a product mix and higher freight costs.
SG&A expenses in the reported quarter were $118.1 million, up 10.8% from the year-ago quarter. The increase was primarily in the higher selling cost due to high compensation expenses from recruiting and mounting traveling expenses. Research and development expenses decreased 61.8% to $19.5 million.
The quarter’s adjusted operating profit rose massively to $66.3 million compared with $30.64 million in the year-ago quarter. The adjusted operating margin expanded 1191 bps in the quarter to 24.2%.
Cash Position
Globus Medical exited 2022 with cash and cash equivalents, and short-term marketable securities of $446.1 million compared with $443.4 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of 2022 was $178.5 million compared with the year-ago figure of $276.3 million.
On Feb 9, 2023, the company announced its plans to acquire the San-Diego based spine technology firm, NuVasive Inc., in an all-stock deal valued at around $3.1 billion. The transaction, which is expected to close in mid-2023, reflects both companies’ vision to improve patient care through innovation in unmet clinical needs.
2023 Guidance
With the planned purchase in the picture, Globus Medical only provided its stand-alone guidance for the full-year 2023.
Full-year net sales are projected at $1.1 billion, indicating 7.5% growth compared with the previous year. The Zacks Consensus Estimate for the same is currently pegged at $1.12 billion.
The company’s adjusted EPS guidance for 2023 is pegged at $2.30, suggesting 11.7% growth compared to 2022. The Zacks Consensus Estimate for the same is pegged at $2.31 currently.
Our Take
Globus Medical exited the fourth quarter of 2022 with an earnings beat and revenue miss. The robust growth of organic revenues in both the United States and the international market is impressive. Rapid market interest and customer demand have positioned Excelsius3D, the company’s latest addition to the Excelsius Ecosystem, as a major growth driver in 2023.
The company delivered its 12th consecutive quarter of sequential growth in the Trauma business, with 70% growth in the reported quarter. Internationally (excluding Japan), Globus’ spinal implant business also delivered double-digit growth in most markets.
Higher net sales and the acquisition of in-process research and development contributed to the quarter’s GAAP net income, which increased 231.4% from the prior year’s quarter figure. With the complementary strengths of Globus engineering and NuVasive relations, education and training, GMED aims to outpace market growth, leading to accelerated EPS growth and an increase in cash flows for investors.
Zacks Rank and Key Picks
Globus Medical currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, carrying a Zacks Rank #2 (Buy), reported a second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported a third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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Globus Medical (GMED) Q4 Earnings Beat, Operating Margin Rises
Quarterly Details
Globus Medical, Inc. Price, Consensus and EPS Surprise
Globus Medical, Inc. price-consensus-eps-surprise-chart | Globus Medical, Inc. Quote
Margin
Cash Position
2023 Guidance
Our Take
Zacks Rank and Key Picks
Globus Medical currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, carrying a Zacks Rank #2 (Buy), reported a second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported a third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.