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Alcon (ALC) Surgical End Market Grows, Vision Care Sales Rise
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Alcon (ALC - Free Report) has been gaining on strong market rebound. The company’s focus on research and innovation is also encouraging. The stock carries a Zacks Rank #2 (Buy).
Alcon has outperformed the industry over the past year. The stock has gained 13.7% compared with the industry’s 10% rise.
Alcon exited the first quarter of 2023 with earnings and revenues beating the estimates. Within the Surgical segment, growth was driven by strong consumables and equipment sales.
In the first quarter, Total Surgical (consisting of implantables, consumables and equipment/other) recorded sales growth of 8% at CER. Within Implantables, excluding the impact from Korea, sales were up roughly 5% on a reported basis and approximately 9% on a constant currency basis. The company continued with its ATIOL market leadership for another quarter, with approximately half of the global market share and two-thirds of the U.S. market despite increasing competitive activity.
In consumables, first-quarter sales were up 13%, driven by favorable market conditions as well as pricing. In equipment, sales were up 14% year over year on continued strong demand for cataract and Vit-Ret devices, particularly in international markets as the company upgraded and expanded its installed base.
In terms of end market, in Surgical, global cataract procedures were up mid-single digits in the first quarter. This growth varies significantly by region. Excluding the impact from Korea, global penetration was up 90 basis points from the prior year and 40 basis points sequentially.
Excluding the impact from Korea, sales were up roughly 5% on a reported basis and approximately 9% on a constant currency basis. The company continued with its intraocular lens market leadership for another quarter, with approximately half of the global market and two-thirds of the U.S. market despite increasing competitive activity. In Equipment, Alcon continued to upgrade and expand its installed base with the CENTURION and LEGION devices.
Within Vision care, the upside was driven by continued growth in silicone hydrogel contact lenses, including the Precision1 and Total product families, and price increases.
On the flip side, during the first quarter, growth in net sales across all segments was marred by unfavorable currency impacts. Further, during the quarter, the company’s operating margin was impacted by legal settlement costs, a rise in inflationary costs, acquisition and integration-related expenses and increased R&D investments post the acquisition of Aerie Pharmaceuticals, Inc.
The cost of net sales in the quarter was up 6.5% year over year. The core operating margin was 14.2% in the quarter, contracting 14 bps year over year at CER. The company’s operating margin in the quarter was impacted by an unfavorable product mix from lower PCIOL sales in South Korea, higher R&D investment following the acquisition of Aerie and a negative 1.3 percentage point impact from currency.
Key Picks
Some other top-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Health Equity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 15.4% compared with the industry’s 12.5% rise in the past year.
HealthEquity, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 9.5% against the industry’s 13.1% decline over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 42.3% against the industry’s 20.5% decline in the past year.
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Alcon (ALC) Surgical End Market Grows, Vision Care Sales Rise
Alcon (ALC - Free Report) has been gaining on strong market rebound. The company’s focus on research and innovation is also encouraging. The stock carries a Zacks Rank #2 (Buy).
Alcon has outperformed the industry over the past year. The stock has gained 13.7% compared with the industry’s 10% rise.
Alcon exited the first quarter of 2023 with earnings and revenues beating the estimates. Within the Surgical segment, growth was driven by strong consumables and equipment sales.
In the first quarter, Total Surgical (consisting of implantables, consumables and equipment/other) recorded sales growth of 8% at CER. Within Implantables, excluding the impact from Korea, sales were up roughly 5% on a reported basis and approximately 9% on a constant currency basis. The company continued with its ATIOL market leadership for another quarter, with approximately half of the global market share and two-thirds of the U.S. market despite increasing competitive activity.
In consumables, first-quarter sales were up 13%, driven by favorable market conditions as well as pricing. In equipment, sales were up 14% year over year on continued strong demand for cataract and Vit-Ret devices, particularly in international markets as the company upgraded and expanded its installed base.
Alcon Price
Alcon price | Alcon Quote
In terms of end market, in Surgical, global cataract procedures were up mid-single digits in the first quarter. This growth varies significantly by region. Excluding the impact from Korea, global penetration was up 90 basis points from the prior year and 40 basis points sequentially.
Excluding the impact from Korea, sales were up roughly 5% on a reported basis and approximately 9% on a constant currency basis. The company continued with its intraocular lens market leadership for another quarter, with approximately half of the global market and two-thirds of the U.S. market despite increasing competitive activity. In Equipment, Alcon continued to upgrade and expand its installed base with the CENTURION and LEGION devices.
Within Vision care, the upside was driven by continued growth in silicone hydrogel contact lenses, including the Precision1 and Total product families, and price increases.
On the flip side, during the first quarter, growth in net sales across all segments was marred by unfavorable currency impacts. Further, during the quarter, the company’s operating margin was impacted by legal settlement costs, a rise in inflationary costs, acquisition and integration-related expenses and increased R&D investments post the acquisition of Aerie Pharmaceuticals, Inc.
The cost of net sales in the quarter was up 6.5% year over year. The core operating margin was 14.2% in the quarter, contracting 14 bps year over year at CER. The company’s operating margin in the quarter was impacted by an unfavorable product mix from lower PCIOL sales in South Korea, higher R&D investment following the acquisition of Aerie and a negative 1.3 percentage point impact from currency.
Key Picks
Some other top-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , Health Equity, Inc. (HQY - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Hologic, carrying a Zacks Rank #2 at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 15.4% compared with the industry’s 12.5% rise in the past year.
HealthEquity, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 22%. HQY’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 9.1%.
HealthEquity has gained 9.5% against the industry’s 13.1% decline over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 42.3% against the industry’s 20.5% decline in the past year.