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Globus Medical, Inc. (GMED - Free Report) reported third-quarter 2024 adjusted earnings per share (EPS) of 83 cents, which beat the Zacks Consensus Estimate by 27.7%. The figure increased 45.6% year over year.
The adjusted EPS excludes certain non-recurring expenses and benefits, such as the amortization of intangibles, merger and acquisition-related costs/licensing, and provision for litigation.
Without adjustments, the company registered a GAAP diluted EPS of 38 cents, up 3700% from the year-ago figure of 1 cent.
Following the earnings announcement, GMED stock rose 10.3% in after-market trading yesterday.
GMED’s Q3 Revenues
Worldwide sales increased a staggering 63.1% year over year to $625.7 million. The reported figure exceeded the Zacks Consensus Estimate by 3.4%.
Net sales improvement was driven by the addition of NuVasive, as well as increased volume of spine product sales and enabling technology products and services.
GMED’s Q3 Geographic Details
Net sales generated in the United States increased 60.3% year over year (same at CER) to $495.8 million. Our model projected a 61.7% improvement in sales from this region.
Across international markets, revenues surged 74.8% (up 76.2% at CER) to $129.9 million, which surpassed our model estimate of $104.3 million.
GMED’s Product Category
Musculoskeletal Solutions generated revenues of $587.4 million, up 65% year over year, mainly driven by contributions from the NuVasive merger. Our model projected a year-over-year top-line improvement of 60.4% from this segment.
Enabling Technologies generated revenues of $38.3 million, up 38.5% from the prior-year reported figure. The growth was driven by increased sales within the U.S. market across its Excelsius GPS and E3D products. The reported figure also surpassed our model estimate of $33.5 million.
Margins
The gross profit in the reported quarter rose 43.1% year over year to $355.2 million. However, the gross margin contracted 794 basis points (bps) to 56.8% on a 99.8% surge in the cost of sales.
SG&A expenses in the reported quarter totaled $240.7 million, up 54.1% from the year-ago quarter’s level. Research and development expenses increased 20.6% to $35.4 million.
Adjusted operating profit rose 26.1% from the year-ago figure to $79.1 million. Despite that, the adjusted operating margin contracted 371 bps to 12.6% due to increased operating expenses.
Cash Position
Globus Medical exited the third quarter of 2024 with combined cash and cash equivalents and short-term marketable securities of $694.7 million compared with $410.4 million at the end of the second quarter of 2024.
Cumulative net cash provided by operating activities at the end of the third quarter was $310.3 million compared with the year-ago figure of $138.3 million.
GMED’s 2024 Guidance
Globus Medical raised its 2024 guidance.
The full-year net sales are now projected to be in the band of $2.49-$2.50 billion (compared with the earlier projected range of $2.47-$2.49 billion). The Zacks Consensus Estimate is currently pegged at $2.48 billion.
Globus Medical, Inc. Price, Consensus and EPS Surprise
The company’s adjusted EPS for 2024 is now expected to be in the range of $2.90-$3.00 (up from the previously guided range of $2.80-$2.90). The Zacks Consensus Estimate is pegged at $2.84.
Our Take
Globus Medical exited the third quarter of 2024 with better-than-expected results, wherein both its earnings and revenues exceeded the Zacks Consensus Estimate. The integrated Globus-NuvaSive team is working together to develop and launch new products via meaningful collaborations, with the pace expected to accelerate in the coming months due to improved internal development processes.
U.S. Spine outpaced market growth owing to the strength of the combined product offering, competitive rep recruiting from prior quarters and increased implant usage through robotic pull-through. Enabling Technologies benefited from higher robotic and imaging system sales. The raised outlook for 2024 buoys optimism.
However, escalating costs and expenses have led to the contraction of both margins during the quarter.
GMED’s Zacks Rank & Other Key Picks
GMED currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Phibro Animal Health (PAHC - Free Report) , Quest Diagnostics (DGX - Free Report) and HealthEquity (HQY - Free Report) .
Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 4.1%.
Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30 per share, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 (Buy) at present.
DGX’s 2024 earnings are expected to surge 2.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.3%.
HealthEquity, carrying a Zacks Rank #2 at present, reported a second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.
HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.
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GMED Q3 Earnings Top, '24 Guidance Raised, Stock Gains in Aftermarket
Globus Medical, Inc. (GMED - Free Report) reported third-quarter 2024 adjusted earnings per share (EPS) of 83 cents, which beat the Zacks Consensus Estimate by 27.7%. The figure increased 45.6% year over year.
The adjusted EPS excludes certain non-recurring expenses and benefits, such as the amortization of intangibles, merger and acquisition-related costs/licensing, and provision for litigation.
Without adjustments, the company registered a GAAP diluted EPS of 38 cents, up 3700% from the year-ago figure of 1 cent.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Following the earnings announcement, GMED stock rose 10.3% in after-market trading yesterday.
GMED’s Q3 Revenues
Worldwide sales increased a staggering 63.1% year over year to $625.7 million. The reported figure exceeded the Zacks Consensus Estimate by 3.4%.
Net sales improvement was driven by the addition of NuVasive, as well as increased volume of spine product sales and enabling technology products and services.
GMED’s Q3 Geographic Details
Net sales generated in the United States increased 60.3% year over year (same at CER) to $495.8 million. Our model projected a 61.7% improvement in sales from this region.
Across international markets, revenues surged 74.8% (up 76.2% at CER) to $129.9 million, which surpassed our model estimate of $104.3 million.
GMED’s Product Category
Musculoskeletal Solutions generated revenues of $587.4 million, up 65% year over year, mainly driven by contributions from the NuVasive merger. Our model projected a year-over-year top-line improvement of 60.4% from this segment.
Enabling Technologies generated revenues of $38.3 million, up 38.5% from the prior-year reported figure. The growth was driven by increased sales within the U.S. market across its Excelsius GPS and E3D products. The reported figure also surpassed our model estimate of $33.5 million.
Margins
The gross profit in the reported quarter rose 43.1% year over year to $355.2 million. However, the gross margin contracted 794 basis points (bps) to 56.8% on a 99.8% surge in the cost of sales.
SG&A expenses in the reported quarter totaled $240.7 million, up 54.1% from the year-ago quarter’s level. Research and development expenses increased 20.6% to $35.4 million.
Adjusted operating profit rose 26.1% from the year-ago figure to $79.1 million. Despite that, the adjusted operating margin contracted 371 bps to 12.6% due to increased operating expenses.
Cash Position
Globus Medical exited the third quarter of 2024 with combined cash and cash equivalents and short-term marketable securities of $694.7 million compared with $410.4 million at the end of the second quarter of 2024.
Cumulative net cash provided by operating activities at the end of the third quarter was $310.3 million compared with the year-ago figure of $138.3 million.
GMED’s 2024 Guidance
Globus Medical raised its 2024 guidance.
The full-year net sales are now projected to be in the band of $2.49-$2.50 billion (compared with the earlier projected range of $2.47-$2.49 billion). The Zacks Consensus Estimate is currently pegged at $2.48 billion.
Globus Medical, Inc. Price, Consensus and EPS Surprise
Globus Medical, Inc. price-consensus-eps-surprise-chart | Globus Medical, Inc. Quote
The company’s adjusted EPS for 2024 is now expected to be in the range of $2.90-$3.00 (up from the previously guided range of $2.80-$2.90). The Zacks Consensus Estimate is pegged at $2.84.
Our Take
Globus Medical exited the third quarter of 2024 with better-than-expected results, wherein both its earnings and revenues exceeded the Zacks Consensus Estimate. The integrated Globus-NuvaSive team is working together to develop and launch new products via meaningful collaborations, with the pace expected to accelerate in the coming months due to improved internal development processes.
U.S. Spine outpaced market growth owing to the strength of the combined product offering, competitive rep recruiting from prior quarters and increased implant usage through robotic pull-through. Enabling Technologies benefited from higher robotic and imaging system sales. The raised outlook for 2024 buoys optimism.
However, escalating costs and expenses have led to the contraction of both margins during the quarter.
GMED’s Zacks Rank & Other Key Picks
GMED currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Phibro Animal Health (PAHC - Free Report) , Quest Diagnostics (DGX - Free Report) and HealthEquity (HQY - Free Report) .
Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 4.1%.
Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30 per share, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 (Buy) at present.
DGX’s 2024 earnings are expected to surge 2.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.3%.
HealthEquity, carrying a Zacks Rank #2 at present, reported a second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.
HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.