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NuVasive (NUVA) Q4 Earnings Miss Estimates, Margins Down
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NuVasive, Inc. delivered adjusted earnings per share (EPS) of 43 cents in fourth-quarter 2022, up 7.5% year over year. However, the figure lagged the Zacks Consensus Estimate by 12.2%.
The one-time adjustments include expenses associated with certain business transition costs and European medical device regulations.
GAAP EPS of 42 cents compared favorably with the year-ago loss of 71 cents. In the full year, adjusted EPS were $1.98, up 17.9% from the year-ago period’s levels. However, the figure missed the Zacks Consensus Estimate by 2.9%.
Total Revenues
Revenues in the fourth quarter totaled $305.4 million, up 1.11% year over year on a reported basis and 4.8% at a constant exchange rate or CER. The top line, however, missed the Zacks Consensus Estimate by 1.8%.
Fourth quarter total net sales were driven by further adoption of new products and solid procedural volumes in the United States.
Total revenues for 2022 were $1.20 billion, up 5.5% from the year-ago period’s levels. The figure lagged the Zacks Consensus Estimate by 0.8%.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 4.6% year over year to $167.8 million on continued growth in the Simplify Cervical Disc and C360 portfolios.
Revenues from the U.S. Surgical Support business were $69.2 million in the fourth quarter, flat year over year. Growth was partially offset by a decline in Biologics.
International net sales for the third quarter were $68.4 million, representing a decline of 4.9% year over year (up 10.7% at CER).
Margin Details
In the reported quarter, gross profit fell 1.8% year over year to $214.7 million. The gross margin contracted 207 basis points (bps) to 70%.
Selling, general and administrative expenses fell 0.9% year over year to $159 million, whereas research and development (R&D) expenses rose 1.4% year over year to $25.6 million.
Overall adjusted operating profit was $29.9 million, down 8.2% year-ago figure. Adjusted operating margin saw a 99-bp contraction year over year to 9.8%.
Financial Details
The company exited 2022 with cash and cash equivalents of $248.7 million, compared with $246.1 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of 2022 was $169.1 million compared with the prior-year period’s $182.2 million.
2023 Guidance
NuVasive provided its guidance for full-year 2023.
The company expects 2023 net sales growth of 6-8% on an as-reported and constant-currency basis. The Zacks Consensus Estimate for the same is pegged at $1.28 billion.
Merger Deal
On February 9, 2023, NuVasive and Globus Medical entered into a definitive agreement to combine the companies in an all-stock transaction. The transaction is expected to complete in the middle of 2023, subject to the approval of the companies’ shareholders, regulatory approval, and other customary closing conditions
Our Take
NuVasive exited the fourth quarter of 2022 on a lower note, with earnings and revenues missing the Zacks Consensus Estimate. 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. Contraction o both margins is discouraging too.
On a positive note, strong sales performance across the U.S. Spinal Hardware and U.S. Surgical Support businesses instill optimism. The continued demand for the Simplified Cervical Disc and the Pulse platforms is also encouraging.
Zacks Rank and Key Picks
NuVasive currently carries Zacks Rank #4 (Sell).
Some better-ranked stocks in 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 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 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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NuVasive (NUVA) Q4 Earnings Miss Estimates, Margins Down
NuVasive, Inc. delivered adjusted earnings per share (EPS) of 43 cents in fourth-quarter 2022, up 7.5% year over year. However, the figure lagged the Zacks Consensus Estimate by 12.2%.
The one-time adjustments include expenses associated with certain business transition costs and European medical device regulations.
GAAP EPS of 42 cents compared favorably with the year-ago loss of 71 cents.
In the full year, adjusted EPS were $1.98, up 17.9% from the year-ago period’s levels. However, the figure missed the Zacks Consensus Estimate by 2.9%.
Total Revenues
Revenues in the fourth quarter totaled $305.4 million, up 1.11% year over year on a reported basis and 4.8% at a constant exchange rate or CER. The top line, however, missed the Zacks Consensus Estimate by 1.8%.
Fourth quarter total net sales were driven by further adoption of new products and solid procedural volumes in the United States.
Total revenues for 2022 were $1.20 billion, up 5.5% from the year-ago period’s levels. The figure lagged the Zacks Consensus Estimate by 0.8%.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 4.6% year over year to $167.8 million on continued growth in the Simplify Cervical Disc and C360 portfolios.
Revenues from the U.S. Surgical Support business were $69.2 million in the fourth quarter, flat year over year. Growth was partially offset by a decline in Biologics.
NuVasive, Inc. Price, Consensus and EPS Surprise
NuVasive, Inc. price-consensus-eps-surprise-chart | NuVasive, Inc. Quote
International net sales for the third quarter were $68.4 million, representing a decline of 4.9% year over year (up 10.7% at CER).
Margin Details
In the reported quarter, gross profit fell 1.8% year over year to $214.7 million. The gross margin contracted 207 basis points (bps) to 70%.
Selling, general and administrative expenses fell 0.9% year over year to $159 million, whereas research and development (R&D) expenses rose 1.4% year over year to $25.6 million.
Overall adjusted operating profit was $29.9 million, down 8.2% year-ago figure. Adjusted operating margin saw a 99-bp contraction year over year to 9.8%.
Financial Details
The company exited 2022 with cash and cash equivalents of $248.7 million, compared with $246.1 million at the end of 2021.
Cumulative net cash provided by operating activities at the end of 2022 was $169.1 million compared with the prior-year period’s $182.2 million.
2023 Guidance
NuVasive provided its guidance for full-year 2023.
The company expects 2023 net sales growth of 6-8% on an as-reported and constant-currency basis. The Zacks Consensus Estimate for the same is pegged at $1.28 billion.
Merger Deal
On February 9, 2023, NuVasive and Globus Medical entered into a definitive agreement to combine the companies in an all-stock transaction. The transaction is expected to complete in the middle of 2023, subject to the approval of the companies’ shareholders, regulatory approval, and other customary closing conditions
Our Take
NuVasive exited the fourth quarter of 2022 on a lower note, with earnings and revenues missing the Zacks Consensus Estimate. 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. Contraction o both margins is discouraging too.
On a positive note, strong sales performance across the U.S. Spinal Hardware and U.S. Surgical Support businesses instill optimism. The continued demand for the Simplified Cervical Disc and the Pulse platforms is also encouraging.
Zacks Rank and Key Picks
NuVasive currently carries Zacks Rank #4 (Sell).
Some better-ranked stocks in 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 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 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%