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Why Is Integra (IART) Down 4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Integra LifeSciences (IART - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Integra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Integra's Q4 Earnings Miss Estimates, Margins Contract
Integra LifeSciences delivered adjusted earnings per share of 89 cents in the fourth quarter of 2023, down 5.3% year over year. The metric missed the Zacks Consensus Estimate by 1.1%.
The adjustment excludes the impact of certain non-recurring charges like amortization expenses, the Boston recall and EU Medical Device Regulation charges.
GAAP earnings per share in the fourth quarter was 25 cents, plunging 60.3% from 63 cents in the year-ago quarter.
For the full year, adjusted earnings per share was $3.10 compared with the year-ago period’s figure of $3.36, down 7.7%.
Revenue Discussion
Total revenues in the reported quarter dropped 0.3% year over year to $397.04 million. The metric missed the Zacks Consensus Estimate by 0.4%. Organically, revenues fell 1.2% year over year. Revenues increased 3.6% on an organic basis excluding Boston.
Total revenues in 2023 were $1.54 billion, down 1% from the year-ago period’s figure.
Segmental Details
Coming to product categories, revenues in the Codman Specialty Surgical (CSS) segment rose 2.7% year over year on a reported basis to $271.6 million (organically, up 2.3%). This improvement can be attributed to mid-single-digit growth in CSF management driven by Certas Plus valves and low-single-digit growth in neuro monitoring propelled by BactiSeal catheters and ICP microsensors, mid-single-digit growth in Dural Access and Repair driven by DuraGen.
Tissue Technologies revenues totaled $125.4 million in the fourth quarter, down 6% year over year on a reported basis and 8% on an organic basis. The downside was due to the impact of the lost revenues related to the Boston product recall, which was partially offset by double-digit growth in BioD and Gentrix and mid-single-digit growth in Integra skin and MediHoney.
Margin Trend
In the reported quarter, gross profit totaled $226.5 million, down 9.4% year over year. The gross margin contracted 579 basis points (bps) to 57%.
Selling, general and administrative expenses rose 7.4% to $163.1 million in the quarter under review, while research and development expenses fell 9.3% to $24.3 million.
Overall, adjusted operating profits were $39.1 million, down 45.3% year over year. Adjusted operating margin saw an 809-bps contraction year over year to 9.8%.
Financial Position
Integra exited 2023 with cash and cash equivalents of $276.4 million, down from $456.7 million at the end of 2022.
Cumulative net cash flow from operating activities at the end of 2023 was $139.9 million compared with $264.5 million at the end of 2022.
Guidance
The company provided its financial guidance for 2024.
For the first quarter of 2024, Integra expects reported revenues in the range of $360-$365 million, suggesting reported growth of nearly -5.5% to -4.1% and organic growth of -5.1% to -3.7%. The Zacks Consensus Estimate for the same is pegged at $384.2 million.
Adjusted earnings per share are expected in the range of 53-57 cents. The Zacks Consensus Estimate for the metric is pegged at 72 cents.
For the full year, IART projects revenues in the band of $1.60-$1.62 billion. This suggests reported and organic growth of 4-5%. The Zacks Consensus Estimate for the same is pegged at $1.63 billion.
The company projects adjusted EPS guidance for 2024 in the $3.15-$3.25. The Zacks Consensus Estimate for the metric is pegged at $3.40.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -22.38% due to these changes.
VGM Scores
At this time, Integra has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Integra 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
Integra is part of the Zacks Medical - Instruments industry. Over the past month, Avanos Medical (AVNS - Free Report) , a stock from the same industry, has gained 7.2%. The company reported its results for the quarter ended December 2023 more than a month ago.
Avanos Medical reported revenues of $173.3 million in the last reported quarter, representing a year-over-year change of -20.3%. EPS of $0.36 for the same period compares with $0.60 a year ago.
Avanos Medical is expected to post earnings of $0.21 per share for the current quarter, representing a year-over-year change of -22.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Avanos Medical. Also, the stock has a VGM Score of B.
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Why Is Integra (IART) Down 4% Since Last Earnings Report?
It has been about a month since the last earnings report for Integra LifeSciences (IART - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Integra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Integra's Q4 Earnings Miss Estimates, Margins Contract
Integra LifeSciences delivered adjusted earnings per share of 89 cents in the fourth quarter of 2023, down 5.3% year over year. The metric missed the Zacks Consensus Estimate by 1.1%.
The adjustment excludes the impact of certain non-recurring charges like amortization expenses, the Boston recall and EU Medical Device Regulation charges.
GAAP earnings per share in the fourth quarter was 25 cents, plunging 60.3% from 63 cents in the year-ago quarter.
For the full year, adjusted earnings per share was $3.10 compared with the year-ago period’s figure of $3.36, down 7.7%.
Revenue Discussion
Total revenues in the reported quarter dropped 0.3% year over year to $397.04 million. The metric missed the Zacks Consensus Estimate by 0.4%. Organically, revenues fell 1.2% year over year. Revenues increased 3.6% on an organic basis excluding Boston.
Total revenues in 2023 were $1.54 billion, down 1% from the year-ago period’s figure.
Segmental Details
Coming to product categories, revenues in the Codman Specialty Surgical (CSS) segment rose 2.7% year over year on a reported basis to $271.6 million (organically, up 2.3%). This improvement can be attributed to mid-single-digit growth in CSF management driven by Certas Plus valves and low-single-digit growth in neuro monitoring propelled by BactiSeal catheters and ICP microsensors, mid-single-digit growth in Dural Access and Repair driven by DuraGen.
Tissue Technologies revenues totaled $125.4 million in the fourth quarter, down 6% year over year on a reported basis and 8% on an organic basis. The downside was due to the impact of the lost revenues related to the Boston product recall, which was partially offset by double-digit growth in BioD and Gentrix and mid-single-digit growth in Integra skin and MediHoney.
Margin Trend
In the reported quarter, gross profit totaled $226.5 million, down 9.4% year over year. The gross margin contracted 579 basis points (bps) to 57%.
Selling, general and administrative expenses rose 7.4% to $163.1 million in the quarter under review, while research and development expenses fell 9.3% to $24.3 million.
Overall, adjusted operating profits were $39.1 million, down 45.3% year over year. Adjusted operating margin saw an 809-bps contraction year over year to 9.8%.
Financial Position
Integra exited 2023 with cash and cash equivalents of $276.4 million, down from $456.7 million at the end of 2022.
Cumulative net cash flow from operating activities at the end of 2023 was $139.9 million compared with $264.5 million at the end of 2022.
Guidance
The company provided its financial guidance for 2024.
For the first quarter of 2024, Integra expects reported revenues in the range of $360-$365 million, suggesting reported growth of nearly -5.5% to -4.1% and organic growth of -5.1% to -3.7%. The Zacks Consensus Estimate for the same is pegged at $384.2 million.
Adjusted earnings per share are expected in the range of 53-57 cents. The Zacks Consensus Estimate for the metric is pegged at 72 cents.
For the full year, IART projects revenues in the band of $1.60-$1.62 billion. This suggests reported and organic growth of 4-5%. The Zacks Consensus Estimate for the same is pegged at $1.63 billion.
The company projects adjusted EPS guidance for 2024 in the $3.15-$3.25. The Zacks Consensus Estimate for the metric is pegged at $3.40.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -22.38% due to these changes.
VGM Scores
At this time, Integra has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Integra 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
Integra is part of the Zacks Medical - Instruments industry. Over the past month, Avanos Medical (AVNS - Free Report) , a stock from the same industry, has gained 7.2%. The company reported its results for the quarter ended December 2023 more than a month ago.
Avanos Medical reported revenues of $173.3 million in the last reported quarter, representing a year-over-year change of -20.3%. EPS of $0.36 for the same period compares with $0.60 a year ago.
Avanos Medical is expected to post earnings of $0.21 per share for the current quarter, representing a year-over-year change of -22.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Avanos Medical. Also, the stock has a VGM Score of B.