We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Integra (IART) Posts Q3 Earnings & Sales Beat, Margins Up
Read MoreHide Full Article
New Jersey-based medical device manufacturer, Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 93 cents in the third quarter of 2016, which marked a 24% increase from the year-ago adjusted number.
Adjusted EPS beat the Zacks Consensus Estimate of 88 cents by 5.7%.
Including one-time items, the company reported earnings of 50 cents per share, a substantial improvement from a loss of 90 cents per share in the year-ago quarter.
Revenue Details
Total revenue in the reported quarter increased 10.6% year over year to $250.3 million, beating the Zacks Consensus Estimate of $249 million. Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, organic revenues rose 9.5% year over year, marking the third consecutive quarter of 9% or higher organic growth.
The third quarter’s solid revenue growth was primarily driven by strong contribution from both the company’s Specialty Surgical Solutions and Orthopedics and Tissue Technologies segments. Additionally, double-digit increases in international sales contributed to the quarter’s top-line growth. This broad-based strength stemmed from a number of different product franchises and geographic regions.
In terms of product categories, revenues from the company's Specialty Surgical Solutions rose 8.4% (up 8% organically) to $159.4 million, aided by a strong performance in the dural repair franchise, which grew in low-double digits in the reported quarter largely due to solid contribution from DuraSeal and DuraGen. Further, management noted broader acceptance of two recent Dural graft product line extensions. Tissue Ablation and NeuroCritical Care registered modest year-over-year growth in the reported quarter on strong increase in international orders.
Orthopedics and Tissue Technologies’ revenues came in at $90.9 million in the third quarter, up 14.7% year over year (up 12.3% organically). Regenerative Technologies, the largest franchise in the segment (70% of total sales within this segment), with mid-teens growth, led the overall growth. Strong contribution came in from core Regenerative Tissue business across multiple product size ranges and the use of advanced technology solutions and a broader set of inpatient clinical applications, including wounds.
Margin Trends
Gross margin expanded 234 basis points (bps) to 64.3% in the reported quarter. Adjusted gross margin improved 230 bps to 69.3%, reflecting favorable product mix.
While selling, general and administrative expenses dropped 0.9% to $112.3 million in the reported quarter, research and development expenses rose 8.5% to $15.1 million. Adjusted operating margin (excluding amortization of intangible asset) experienced an expansion of 769 bps to 13.4% in the third quarter.
Financial Position
Integra LifeSciences exited the third quarter of 2016 with cash and cash equivalents of $107.6 million, up from $86.8 million at the end of the second quarter. Year to date, net cash flow from operating activities was $109.8 million, higher than $79.2 million in the year-ago period.
2016 Outlook
Integra has reiterated its full-year 2016 revenue guidance of $992 million to $1.002 billion. However, organic growth expectation has been raised to a new range of 9%–9.5% (earlier view was 8%).
The company has raised the lower end of its 2016 adjusted EPS to the range of $3.47–$3.53 ($3.43–$3.53).
Our Take
Integra Lifesciences reported another impressive quarter with earnings and revenues both ahead of the respective Zacks Consensus Estimate. Strong year-over-year improvement on the revenue front, in particular, is indicative of the company's healthy growth via organic and inorganic means across all its segments.
However, the company, in spite of posting a promising third quarter, refrained from raising its fiscal guidance, adding to our worries. We also remain concerned about the unfavorable foreign currency fluctuations that can considerably hamper Integra Lifesciences’ financial performance in the coming quarters. Nonetheless, we believe the company will successfully overcome these hurdles soon, backed by new product launches and an efficient management team.
GW Pharmaceuticals surged 67.4% year to date compared to the S&P 500’s 4.36% over the same period. The company’s four-quarter average earnings surprise is 41.7%.
Insulet Corporation rallied 22.9% in the past one year, higher than the S&P 500’s 2.09%. Over the next five years, the stock is estimated to record an earnings growth rate of 25%, higher than the industry average of 15%.
Baxter’s shares soared 22.7% year to date. Over the next five years, the stock is expected to see 12.3% earnings growth. It has a trailing four-quarter average earnings surprise of 27%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Integra (IART) Posts Q3 Earnings & Sales Beat, Margins Up
New Jersey-based medical device manufacturer, Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 93 cents in the third quarter of 2016, which marked a 24% increase from the year-ago adjusted number.
Adjusted EPS beat the Zacks Consensus Estimate of 88 cents by 5.7%.
Including one-time items, the company reported earnings of 50 cents per share, a substantial improvement from a loss of 90 cents per share in the year-ago quarter.
Revenue Details
Total revenue in the reported quarter increased 10.6% year over year to $250.3 million, beating the Zacks Consensus Estimate of $249 million. Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, organic revenues rose 9.5% year over year, marking the third consecutive quarter of 9% or higher organic growth.
INTEGRA LIFESCI Price, Consensus and EPS Surprise
INTEGRA LIFESCI Price, Consensus and EPS Surprise | INTEGRA LIFESCI Quote
The third quarter’s solid revenue growth was primarily driven by strong contribution from both the company’s Specialty Surgical Solutions and Orthopedics and Tissue Technologies segments. Additionally, double-digit increases in international sales contributed to the quarter’s top-line growth. This broad-based strength stemmed from a number of different product franchises and geographic regions.
In terms of product categories, revenues from the company's Specialty Surgical Solutions rose 8.4% (up 8% organically) to $159.4 million, aided by a strong performance in the dural repair franchise, which grew in low-double digits in the reported quarter largely due to solid contribution from DuraSeal and DuraGen. Further, management noted broader acceptance of two recent Dural graft product line extensions. Tissue Ablation and NeuroCritical Care registered modest year-over-year growth in the reported quarter on strong increase in international orders.
Orthopedics and Tissue Technologies’ revenues came in at $90.9 million in the third quarter, up 14.7% year over year (up 12.3% organically). Regenerative Technologies, the largest franchise in the segment (70% of total sales within this segment), with mid-teens growth, led the overall growth. Strong contribution came in from core Regenerative Tissue business across multiple product size ranges and the use of advanced technology solutions and a broader set of inpatient clinical applications, including wounds.
Margin Trends
Gross margin expanded 234 basis points (bps) to 64.3% in the reported quarter. Adjusted gross margin improved 230 bps to 69.3%, reflecting favorable product mix.
While selling, general and administrative expenses dropped 0.9% to $112.3 million in the reported quarter, research and development expenses rose 8.5% to $15.1 million. Adjusted operating margin (excluding amortization of intangible asset) experienced an expansion of 769 bps to 13.4% in the third quarter.
Financial Position
Integra LifeSciences exited the third quarter of 2016 with cash and cash equivalents of $107.6 million, up from $86.8 million at the end of the second quarter. Year to date, net cash flow from operating activities was $109.8 million, higher than $79.2 million in the year-ago period.
2016 Outlook
Integra has reiterated its full-year 2016 revenue guidance of $992 million to $1.002 billion. However, organic growth expectation has been raised to a new range of 9%–9.5% (earlier view was 8%).
The company has raised the lower end of its 2016 adjusted EPS to the range of $3.47–$3.53 ($3.43–$3.53).
Our Take
Integra Lifesciences reported another impressive quarter with earnings and revenues both ahead of the respective Zacks Consensus Estimate. Strong year-over-year improvement on the revenue front, in particular, is indicative of the company's healthy growth via organic and inorganic means across all its segments.
However, the company, in spite of posting a promising third quarter, refrained from raising its fiscal guidance, adding to our worries. We also remain concerned about the unfavorable foreign currency fluctuations that can considerably hamper Integra Lifesciences’ financial performance in the coming quarters. Nonetheless, we believe the company will successfully overcome these hurdles soon, backed by new product launches and an efficient management team.
Zacks Rank & Key Picks
Integra currently has a Zacks Rank #4 (Sell).
Some top-ranked stocks in the broader medical space include GW Pharmaceuticals plc , Insulet Corporation (PODD - Free Report) and Baxter International Inc. (BAX - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GW Pharmaceuticals surged 67.4% year to date compared to the S&P 500’s 4.36% over the same period. The company’s four-quarter average earnings surprise is 41.7%.
Insulet Corporation rallied 22.9% in the past one year, higher than the S&P 500’s 2.09%. Over the next five years, the stock is estimated to record an earnings growth rate of 25%, higher than the industry average of 15%.
Baxter’s shares soared 22.7% year to date. Over the next five years, the stock is expected to see 12.3% earnings growth. It has a trailing four-quarter average earnings surprise of 27%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>