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AngioDynamics (ANGO) Misses Q4 Earnings & Revenue Estimates

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AngioDynamics Inc. (ANGO - Free Report) reported fourth-quarter fiscal 2018 adjusted earnings of 20 cents per share, which missed the Zacks Consensus Estimate by a penny. Earnings improved 5.3% year over year.

Net sales came in at $88.3 million, marginally missing the Zacks Consensus Estimate of $89 million. However, sales improved 1.6% from the prior-year figure.

Meanwhile, in the past year, shares of AngioDynamics have rallied 17.9% against the industry’s decline of 12%.

Geographical Analysis

U.S. net revenues in the quarter under review were $70.3 million, down 1% at constant currency (cc). Per management, the downside can be attributed to lower sales of Venous Insufficiency, PICCs, RFA (Radio Frequency Ablation) and NanoKnife product lines.

International revenues totaled $18 million, up 9% at cc primarily owing to strong performance in Europe.

Segmental Analysis

Peripheral Vascular (PV) business

Sales in the segment came in at $52.6 million, which declined 2.5% on a year-over-year basis. Per management, growth in the Fluid Management, Angiographic catheters and AngioVac product lines was offset by declines in the Venous Insufficiency and Thrombolytic businesses.

AngioVac procedural volumes remained strong and were up 14% year over year in the reported quarter.

However, the Venous Insufficiency business continued to underperform. This was due to the discontinuation of exclusive use of the EVLT (Endovenous Laser System) products by the company’s largest customer.

Vascular Access (VA) business

Vascular Access net sales were $23.7 million, down 2.4% from the year-ago quarter. Per management, growth in Ports and Dialysis products was offset by declines in PICCs.

Oncology/Surgery business

Sales in this segment grossed $12.1 million, up a significant 38%. The upside can be attributed to strong growth in Solero Microwave Ablation System. However, an increase in sales of NanoKnife was partially offset by lower sales of RFA system.

AngioDynamics, Inc. Price, Consensus and EPS Surprise

 

AngioDynamics, Inc. Price, Consensus and EPS Surprise | AngioDynamics, Inc. Quote

Margin Analysis

In the quarter under review, gross profit totaled $47.5 million, up 12.1% on a year-over-year basis. Adjusted gross margin was 53.7%, which expanded 190 basis points (bps).

Adjusted operating income came in at $4.4 million against the year-over-year operating loss of $11.3 million.

Financial Condition

For the fiscal fourth quarter, AngioDynamics generated $23.8 million in operating cash flow and $23.0 million in free cash flow.

FY18 at a Glance

Revenues for fiscal 2018 totaled $344.3 million, down 1.6% from the year-ago period.

Earnings per share of 74 cents inched up 1.4% from a year ago.

Revenues at the core Peripheral Vascular segment accounted for 58.8% of total sales.

Revenues at Vascular Access contributed 26.9%, while that at Oncology/Surgery represented 14.3%.

FY19 Guidance

AngioDynamics expects fiscal 2019 net sales in the range of $344-$349 million. The Zacks Consensus Estimate is pegged at $347.6 million, within the guided range.

Adjusted earnings per share are anticipated in the band of 82-86 cents. The Zacks Consensus Estimate is pinned at 93 cents, above the guided range.

Free cash flow is expected between $38 million and $43 million.

Our Take

AngioDynamics exited the fourth quarter of fiscal 2018 on a dull note. Solid performance by the Oncology/Surgery segment is encouraging. Surging international sales buoy optimism. The company continues to witness strong growth in its oncology ablation, Solero and NanoKnife product lines. In the fourth quarter, the company witnessed a significant expansion in gross margin. Increased R&D investments in the thrombus management portfolio are a positive.

On the flip side, underperformance of the core Peripheral Vascular and Vascular Access units raise concern. In the reported quarter, AngioDynamics saw persistent headwinds in the Venous Insufficiency business and PICC product lines. Declining sales in the United States and intense competition add to the woes.

Zacks Rank & Key Picks

AngioDynamics currently carries a Zacks Rank #3 (Hold).

A few better-ranked medical stocks in the broader medical space are Abiomed, Inc. (ABMD - Free Report) , Baxter International (BAX - Free Report) and Bio-Rad Laboratories (BIO - Free Report) .

Abiomed has an expected long-term earnings growth rate of 27%. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Baxter has a projected long-term earnings growth rate of 13.4%. The stock carries a Zacks Rank #2.

Bio-Rad has a long-term earnings growth rate of 15%. The stock carries a Zacks Rank #2.

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