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Avanos Medical (AVNS) Up 0.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Avanos Medical (AVNS - Free Report) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Avanos Medical due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Avanos Q3 Earnings Top Estimates, Margins Contract
Avanos reported third-quarter 2023 adjusted earnings per share from continuing operations of 30 cents, up 25% year over year. The bottom line topped the Zacks Consensus Estimate by a penny.
GAAP loss per share from continuing operations in the quarter under review was 19 cents against the year-ago period’s earnings per share of 23 cents.
Revenues
Revenues grossed $171.3 million in the reported quarter, down 0.6% year over year. The metric beat the Zacks Consensus Estimate by 3.8%.
Per management, the top line was hampered by lower hyaluronic acid portfolio (HA) sales. Lower revenues from the Pain Management and Recovery portfolio also weighed on the top line. However, this was offset by a higher volume in the Digestive Health portfolio and slightly favorable pricing and foreign currency translation effects.
Excluding currency and the impact of products no longer sold, organic growth was flat.
Segmental Analysis
Avanos provides a portfolio of innovative product offerings that focus on Pain Management and Recovery and Digestive Health.
Pain Management and Recovery’s net revenues of $76.3 million decreased 11.7% year over year on a reported basis. At constant exchange rate (CER), revenues were down 10%. Although the segment benefited from Diros revenues, the negative impact of foreign exchange and Avanos’ previously-announced decision to discontinue certain low-growth, low-margin products dragged the revenues. Management also confirmed witnessing continued softness across the Game Ready and HA product categories during the reported quarter.
Digestive Health’s net revenues of $95 million improved 10.6% year over year. At CER, revenues were up nearly 10.5%. The business saw continued strong execution for NeoMed. Avanos also recorded continued expansion of its U.S. CORTRAK standard of care offering.
Margin Analysis
In the quarter under review, Avanos’ gross profit fell 4.7% to $95.5 million. The gross margin contracted 240 basis points (bps) to 55.8%.
Selling and general expenses rose 0.5% to $78.7 million. Research and development expenses decreased 14.1% year over year to $6.1 million. Adjusted operating expenses of $84.8 million decreased 0.7% year over year.
Adjusted operating profit totaled $10.7 million, reflecting a 27.7% decline from the prior-year quarter’s level. Adjusted operating margin in the third quarter contracted 234 bps to 6.2%.
Financial Update
The company exited third-quarter 2023 with cash and cash equivalents worth $107.1 million compared with $81.8 million at the end of second quarter. Total debt at the third-quarter end was $264.5 million compared with $209.5 million at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2023 totaled $19.7 million compared with $57.2 million in the prior-year period.
Guidance
Avanos has reiterated its 2023 continuing operations guidance.
The company continues to estimate its revenues for the full year in the range of $675 million-$685 million.
Avanos continues to anticipate 2023 adjusted earnings per share between $1.05 and $1.15. The Zacks Consensus Estimate currently stands at $1.14.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Avanos Medical has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Avanos Medical has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Avanos Medical belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Edwards Lifesciences (EW - Free Report) , has gained 3.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Edwards Lifesciences reported revenues of $1.48 billion in the last reported quarter, representing a year-over-year change of +12.3%. EPS of $0.59 for the same period compares with $0.61 a year ago.
Edwards Lifesciences is expected to post earnings of $0.64 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.
Edwards Lifesciences has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Avanos Medical (AVNS) Up 0.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Avanos Medical (AVNS - Free Report) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Avanos Medical due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Avanos Q3 Earnings Top Estimates, Margins Contract
Avanos reported third-quarter 2023 adjusted earnings per share from continuing operations of 30 cents, up 25% year over year. The bottom line topped the Zacks Consensus Estimate by a penny.
GAAP loss per share from continuing operations in the quarter under review was 19 cents against the year-ago period’s earnings per share of 23 cents.
Revenues
Revenues grossed $171.3 million in the reported quarter, down 0.6% year over year. The metric beat the Zacks Consensus Estimate by 3.8%.
Per management, the top line was hampered by lower hyaluronic acid portfolio (HA) sales. Lower revenues from the Pain Management and Recovery portfolio also weighed on the top line. However, this was offset by a higher volume in the Digestive Health portfolio and slightly favorable pricing and foreign currency translation effects.
Excluding currency and the impact of products no longer sold, organic growth was flat.
Segmental Analysis
Avanos provides a portfolio of innovative product offerings that focus on Pain Management and Recovery and Digestive Health.
Pain Management and Recovery’s net revenues of $76.3 million decreased 11.7% year over year on a reported basis. At constant exchange rate (CER), revenues were down 10%. Although the segment benefited from Diros revenues, the negative impact of foreign exchange and Avanos’ previously-announced decision to discontinue certain low-growth, low-margin products dragged the revenues. Management also confirmed witnessing continued softness across the Game Ready and HA product categories during the reported quarter.
Digestive Health’s net revenues of $95 million improved 10.6% year over year. At CER, revenues were up nearly 10.5%. The business saw continued strong execution for NeoMed. Avanos also recorded continued expansion of its U.S. CORTRAK standard of care offering.
Margin Analysis
In the quarter under review, Avanos’ gross profit fell 4.7% to $95.5 million. The gross margin contracted 240 basis points (bps) to 55.8%.
Selling and general expenses rose 0.5% to $78.7 million. Research and development expenses decreased 14.1% year over year to $6.1 million. Adjusted operating expenses of $84.8 million decreased 0.7% year over year.
Adjusted operating profit totaled $10.7 million, reflecting a 27.7% decline from the prior-year quarter’s level. Adjusted operating margin in the third quarter contracted 234 bps to 6.2%.
Financial Update
The company exited third-quarter 2023 with cash and cash equivalents worth $107.1 million compared with $81.8 million at the end of second quarter. Total debt at the third-quarter end was $264.5 million compared with $209.5 million at the second-quarter end.
Cumulative net cash provided by operating activities at the end of third-quarter 2023 totaled $19.7 million compared with $57.2 million in the prior-year period.
Guidance
Avanos has reiterated its 2023 continuing operations guidance.
The company continues to estimate its revenues for the full year in the range of $675 million-$685 million.
Avanos continues to anticipate 2023 adjusted earnings per share between $1.05 and $1.15. The Zacks Consensus Estimate currently stands at $1.14.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Avanos Medical has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Avanos Medical has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Avanos Medical belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Edwards Lifesciences (EW - Free Report) , has gained 3.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Edwards Lifesciences reported revenues of $1.48 billion in the last reported quarter, representing a year-over-year change of +12.3%. EPS of $0.59 for the same period compares with $0.61 a year ago.
Edwards Lifesciences is expected to post earnings of $0.64 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.
Edwards Lifesciences has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.