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Teleflex (TFX) Q4 Earnings Top Estimates, Operating Margin Down
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Teleflex Incorporated's (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $3.52 for the fourth quarter of 2022 declined 2.2% from the year-ago figure. However, it topped the Zacks Consensus Estimate by 2.3%.
GAAP EPS of $1.65 for the fourth quarter showed a 38.7% plunge from the year-ago figure.
Full-year adjusted EPS was $13.06, a 2% decline from the year-ago period. This adjusted figure topped the Zacks Consensus Estimate by 0.6%.
Revenues in Detail
Net revenues in the fourth quarter dropped 0.5% year over year to $757.9 million but were up 3.7% on a constant exchange rate or CER. The top line lagged the Zacks Consensus Estimate by 0.3%.
Teleflex Incorporated Price, Consensus and EPS Surprise
For 2022, revenues were $2.79 billion, down 0.7% on a reported basis but up 2.9% at CER compared to the year-ago period. The figure came in line with the Zacks Consensus Estimate.
Quarter in Detail
Americas’ net revenues of $458 million rose 2.4% from the year-ago period and were up 1.7% at CER despite a tough year-over-year comparison. Excluding the impact of the year-over-year decline in MSA sales, Americas revenues grew 2.7% in the quarter. Interventional and Surgical recorded double-digit growth offset by declines in other part of the business, including Interventional Urology.
EMEA net revenues of $147.8 million declined 10.2% year over year but improved 1.4% at CER. The company continued to see procedure volumes improvement on a year-over-year basis.
Revenues from Asia rose 13.3% at CER to $78.5 million, backed by strong contributions from growth in all geographies.
Segmental Revenues
In the fourth quarter, the Vascular Access segment recorded net revenues of $186.4 million, up 0.5% at CER. The Interventional business registered net revenues of $125.1 million, up 13.4% at CER.
Within the Anesthesia segment, net revenues improved 2% at CER to $99.6 million. The Surgical segment recorded net revenues of $110.4 million, reflecting an increase of 10.4% year over year at CER. Revenues of $89.2 million in the Interventional Urology segment declined 3.6% at CER.
Meanwhile, OEM recorded revenue growth of $73.7 million, up 12% 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 $73.6 million registered a decline of 7.1% year over year at CER.
Margins
In the reported quarter, gross profit totaled $422.1 million, up 0.6% year over year. The gross margin expanded 59 basis points (bps) to 55.7%.
Overall, adjusted operating profit was $145.9 million, down 6.7% year over year. Adjusted operating margin saw a 127-bp contraction year over year to 19.3%.
Liquidity Position
Teleflex exited 2022 with cash and cash equivalents of $292 million, down from $445.1 million at the end of 2021.
Cumulative cash flow provided by operating activities from continuing operations at the end of the fourth quarter of 2022 was $342.8 million compared with $652.1 million in the year-ago period.
GAAP revenue growth for 2023 is expected in the range of 4.25% to 5.75%. The company’s constant currency revenue growth expectation for 2023 lies in the band of 4.75% to 6.25%. The current Zacks Consensus Estimate for total revenues is pegged at $2.91 billion.
The company projects 2023 adjusted EPS from continuing operations in the range of $13.00 to $13.60, suggesting a decline of 0.5% to growth of 4.1% from the comparable reported figure in 2022. The Zacks Consensus Estimate for the same is currently pegged at $13.49.
Our Take
Teleflex exited the fourth 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 in both adjusted EPS and revenues. Escalating expenses put pressure on the operating margin.
On a positive note, all the geographic segments recorded year-over-year growth at CER. China growth approached 7% despite COVID-associated disruptions toward the end of the quarter.
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 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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Teleflex (TFX) Q4 Earnings Top Estimates, Operating Margin Down
Teleflex Incorporated's (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $3.52 for the fourth quarter of 2022 declined 2.2% from the year-ago figure. However, it topped the Zacks Consensus Estimate by 2.3%.
GAAP EPS of $1.65 for the fourth quarter showed a 38.7% plunge from the year-ago figure.
Full-year adjusted EPS was $13.06, a 2% decline from the year-ago period. This adjusted figure topped the Zacks Consensus Estimate by 0.6%.
Revenues in Detail
Net revenues in the fourth quarter dropped 0.5% year over year to $757.9 million but were up 3.7% on a constant exchange rate or CER. The top line lagged the Zacks Consensus Estimate by 0.3%.
Teleflex Incorporated Price, Consensus and EPS Surprise
Teleflex Incorporated price-consensus-eps-surprise-chart | Teleflex Incorporated Quote
For 2022, revenues were $2.79 billion, down 0.7% on a reported basis but up 2.9% at CER compared to the year-ago period. The figure came in line with the Zacks Consensus Estimate.
Quarter in Detail
Americas’ net revenues of $458 million rose 2.4% from the year-ago period and were up 1.7% at CER despite a tough year-over-year comparison. Excluding the impact of the year-over-year decline in MSA sales, Americas revenues grew 2.7% in the quarter. Interventional and Surgical recorded double-digit growth offset by declines in other part of the business, including Interventional Urology.
EMEA net revenues of $147.8 million declined 10.2% year over year but improved 1.4% at CER. The company continued to see procedure volumes improvement on a year-over-year basis.
Revenues from Asia rose 13.3% at CER to $78.5 million, backed by strong contributions from growth in all geographies.
Segmental Revenues
In the fourth quarter, the Vascular Access segment recorded net revenues of $186.4 million, up 0.5% at CER. The Interventional business registered net revenues of $125.1 million, up 13.4% at CER.
Within the Anesthesia segment, net revenues improved 2% at CER to $99.6 million. The Surgical segment recorded net revenues of $110.4 million, reflecting an increase of 10.4% year over year at CER. Revenues of $89.2 million in the Interventional Urology segment declined 3.6% at CER.
Meanwhile, OEM recorded revenue growth of $73.7 million, up 12% 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 $73.6 million registered a decline of 7.1% year over year at CER.
Margins
In the reported quarter, gross profit totaled $422.1 million, up 0.6% year over year. The gross margin expanded 59 basis points (bps) to 55.7%.
Overall, adjusted operating profit was $145.9 million, down 6.7% year over year. Adjusted operating margin saw a 127-bp contraction year over year to 19.3%.
Liquidity Position
Teleflex exited 2022 with cash and cash equivalents of $292 million, down from $445.1 million at the end of 2021.
Cumulative cash flow provided by operating activities from continuing operations at the end of the fourth quarter of 2022 was $342.8 million compared with $652.1 million in the year-ago period.
The company has a dividend payout ratioof 10% at present.
2023 View
Teleflex provided its 2023 financial guidance.
GAAP revenue growth for 2023 is expected in the range of 4.25% to 5.75%. The company’s constant currency revenue growth expectation for 2023 lies in the band of 4.75% to 6.25%. The current Zacks Consensus Estimate for total revenues is pegged at $2.91 billion.
The company projects 2023 adjusted EPS from continuing operations in the range of $13.00 to $13.60, suggesting a decline of 0.5% to growth of 4.1% from the comparable reported figure in 2022. The Zacks Consensus Estimate for the same is currently pegged at $13.49.
Our Take
Teleflex exited the fourth 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 in both adjusted EPS and revenues. Escalating expenses put pressure on the operating margin.
On a positive note, all the geographic segments recorded year-over-year growth at CER. China growth approached 7% despite COVID-associated disruptions toward the end of the quarter.
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 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%