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CONMED Beats on Q3 Earnings, Misses on Sales, Lowers '24 Sales View
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CONMED Corporation (CNMD - Free Report) delivered third-quarter 2024 adjusted earnings per share (EPS) of $1.05, which beat the Zacks Consensus Estimate of 99 cents by 6.1%. The bottom line improved 16.7% from the year-ago level.
GAAP EPS for the quarter was $1.57 compared with 50 cents in the year-ago period.
The company’s shares have lost 40.4% so far this years compared with the industry’s decline of 1.5%. The broader S&P 500 Index has gained 22.9% in the same time frame.
Image Source: Zacks Investment Research
Revenues in Detail
CONMED’s revenues totaled $317 million, up 4% year over year. The top line missed the Zacks Consensus Estimate by 0.6%. At constant exchange rate (CER), revenues increased 4.3%.
The top line was driven by strong growth of AirSeal insufflator in the United States and international markets.
Segmental Details
Revenues in the Orthopedic Surgery segment totaled $130.5 million, up 4.7% from the year-ago level on a reported basis. At CER, revenues increased 5.2%.
Sales improved 7.4% on a reported basis in the United States. The figure increased 3.1% (up 3.9% at CER) year over year in international markets.
Revenues in the General Surgery segment amounted to $186.2 million, up 3.5% year over year on a reported basis and 3.6% at CER. U.S. sales increased 7.4% year over year. International sales declined 5.3% on a reported basis (down 5% at CER).
Sales by Geography
Sales in the United States totaled $183.2 million, up 7.4% year over year. International sales amounted to $133.5 million, down 0.4% year over year on a reported basis but up 0.2% at CER.
Margins
CONMED’s gross profit improved 6.5% to $179 million. The gross margin improved 130 basis points to 56.5%.
Selling & administrative expenses decreased 20.4% to $99.7 million. Research and development expenses increased 8.8% year over year to $13.6 million.
The company recorded an operating income of $65.7 million compared with $30.3 million in the prior-year quarter. The operating margin was 20.7%, up 1080 basis points.
Financial Position
CNMD exited the third quarter with cash, cash equivalents and investments of $28.9 million compared with $33.9 million in the previous quarter.
Total assets decreased to $2.29 billion from $2.31 billion on a sequential basis.
2024 Guidance Revised
CONMED lowered its revenue guidance for 2024 based on incremental foreign currency headwinds. However, the earnings outlook improved.
The company now expects revenues to be between $1.3 billion and $1.305 billion for 2024 compared with the prior guidance of $1.305-$1.315 billion. The Zacks Consensus Estimate is currently pegged at $1.31 billion.
Adjusted EPS is now expected to be in the range of $4.00-$4.05 compared with the prior guided range of $3.95-$4.02. The Zacks Consensus Estimate is currently pegged at $3.99.
The company also provided guidance for the fourth quarter. Revenues are expected to be between $339 million and $344 million. EPS is projected to be in the range of $1.18-$1.23.
CONMED Corporation Price, Consensus and EPS Surprise
CONMED exited the third quarter of 2024 on a mixed note, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. The third quarter witnessed the positive impact of strong demand for CNMD’s AirSeal insufflator. The product is expected to continue to drive the top line in the upcoming quarter as well.
However, the U.S. foot and ankle business sales are likely to be unfavorably impacted as Hurricanes Helene and Milton hit the Southeast region of the United States during the end of September and early October. The storms disrupted manufacturing at CNMD’s facility at Largo, responsible for its orthopedic products, including the shutdown of the facility for four days. This may affect the supply of products during the fourth quarter. Several procedures were rescheduled during the storms, which may hurt sales in the upcoming quarter. The affected region generates 35% of the company’s U.S. foot and ankle business.
Meanwhile, Hurricane Helene’s devastation in North Carolina affected a key medtech player that supplies IV solutions, leading to delayed surgical procedures. This will likely affect the procedure volume in the fourth quarter.
The storms have also led the company to lower its revenue outlook for 2024. However, improving earnings expectation looks promising.
ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 19.2% year to date against the industry’s 6.1% growth.
Avanos, sporting a Zacks Rank of 1 at present, has an estimated growth rate of 31.2% for 2025. AVNS’ earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 5.7%.
Avanos’ shares have risen 5.3% year to date compared with the industry’s 5.1% growth.
Globus Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.1%. Its shares have risen 38.7% year to date compared with the industry’s 6.1% growth.
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CONMED Beats on Q3 Earnings, Misses on Sales, Lowers '24 Sales View
CONMED Corporation (CNMD - Free Report) delivered third-quarter 2024 adjusted earnings per share (EPS) of $1.05, which beat the Zacks Consensus Estimate of 99 cents by 6.1%. The bottom line improved 16.7% from the year-ago level.
GAAP EPS for the quarter was $1.57 compared with 50 cents in the year-ago period.
The company’s shares have lost 40.4% so far this years compared with the industry’s decline of 1.5%. The broader S&P 500 Index has gained 22.9% in the same time frame.
Image Source: Zacks Investment Research
Revenues in Detail
CONMED’s revenues totaled $317 million, up 4% year over year. The top line missed the Zacks Consensus Estimate by 0.6%. At constant exchange rate (CER), revenues increased 4.3%.
The top line was driven by strong growth of AirSeal insufflator in the United States and international markets.
Segmental Details
Revenues in the Orthopedic Surgery segment totaled $130.5 million, up 4.7% from the year-ago level on a reported basis. At CER, revenues increased 5.2%.
Sales improved 7.4% on a reported basis in the United States. The figure increased 3.1% (up 3.9% at CER) year over year in international markets.
Revenues in the General Surgery segment amounted to $186.2 million, up 3.5% year over year on a reported basis and 3.6% at CER. U.S. sales increased 7.4% year over year. International sales declined 5.3% on a reported basis (down 5% at CER).
Sales by Geography
Sales in the United States totaled $183.2 million, up 7.4% year over year. International sales amounted to $133.5 million, down 0.4% year over year on a reported basis but up 0.2% at CER.
Margins
CONMED’s gross profit improved 6.5% to $179 million. The gross margin improved 130 basis points to 56.5%.
Selling & administrative expenses decreased 20.4% to $99.7 million. Research and development expenses increased 8.8% year over year to $13.6 million.
The company recorded an operating income of $65.7 million compared with $30.3 million in the prior-year quarter. The operating margin was 20.7%, up 1080 basis points.
Financial Position
CNMD exited the third quarter with cash, cash equivalents and investments of $28.9 million compared with $33.9 million in the previous quarter.
Total assets decreased to $2.29 billion from $2.31 billion on a sequential basis.
2024 Guidance Revised
CONMED lowered its revenue guidance for 2024 based on incremental foreign currency headwinds. However, the earnings outlook improved.
The company now expects revenues to be between $1.3 billion and $1.305 billion for 2024 compared with the prior guidance of $1.305-$1.315 billion. The Zacks Consensus Estimate is currently pegged at $1.31 billion.
Adjusted EPS is now expected to be in the range of $4.00-$4.05 compared with the prior guided range of $3.95-$4.02. The Zacks Consensus Estimate is currently pegged at $3.99.
The company also provided guidance for the fourth quarter. Revenues are expected to be between $339 million and $344 million. EPS is projected to be in the range of $1.18-$1.23.
CONMED Corporation Price, Consensus and EPS Surprise
CONMED Corporation price-consensus-eps-surprise-chart | CONMED Corporation Quote
Our Take
CONMED exited the third quarter of 2024 on a mixed note, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. The third quarter witnessed the positive impact of strong demand for CNMD’s AirSeal insufflator. The product is expected to continue to drive the top line in the upcoming quarter as well.
However, the U.S. foot and ankle business sales are likely to be unfavorably impacted as Hurricanes Helene and Milton hit the Southeast region of the United States during the end of September and early October. The storms disrupted manufacturing at CNMD’s facility at Largo, responsible for its orthopedic products, including the shutdown of the facility for four days. This may affect the supply of products during the fourth quarter. Several procedures were rescheduled during the storms, which may hurt sales in the upcoming quarter. The affected region generates 35% of the company’s U.S. foot and ankle business.
Meanwhile, Hurricane Helene’s devastation in North Carolina affected a key medtech player that supplies IV solutions, leading to delayed surgical procedures. This will likely affect the procedure volume in the fourth quarter.
The storms have also led the company to lower its revenue outlook for 2024. However, improving earnings expectation looks promising.
Zacks Rank and Stocks to Consider
CNMD carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the same medical industry are AngioDynamics (ANGO - Free Report) , Avanos Medical (AVNS - Free Report) and Globus Medical (GMED - Free Report) .
AngioDynamics, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 38.2% for 2025. You can seethe complete list of today’s Zacks #1 Rank stocks here.
ANGO’s earnings surpassed estimates in three of the trailing four quarters and missed once, delivering an average surprise of 31.71%.
AngioDynamics’ shares have lost 19.2% year to date against the industry’s 6.1% growth.
Avanos, sporting a Zacks Rank of 1 at present, has an estimated growth rate of 31.2% for 2025. AVNS’ earnings surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 5.7%.
Avanos’ shares have risen 5.3% year to date compared with the industry’s 5.1% growth.
Globus Medical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 12.1%. Its shares have risen 38.7% year to date compared with the industry’s 6.1% growth.