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Why Is Conmed (CNMD) Down 2.8% Since Last Earnings Report?

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It has been about a month since the last earnings report for Conmed (CNMD - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Conmed 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 drivers.

CONMED (CNMD - Free Report) Beats Earnings in Q3 on Strength in Orthopedic Surgery

CONMED Corporation posted third-quarter 2018 adjusted earnings per share of 46 cents, which beat the Zacks Consensus Estimate by a penny. Also, the figure improved 9.5% from the year-ago quarter’s tally.

The New York-based medical products manufacturer posted revenues of $202.3 million, up 6.4% on a year-over-year basis and 7.4% at constant currency (cc). Notably, the figure surpassed the Zacks Consensus Estimate of $198.9 million.

The stock carries a Zacks Rank #3 (Hold).

Segment Details

Orthopedic Surgery

Revenues in the segment totaled $102.9 million, up 4.4% from the year-ago quarter's tally.

Domestically, Orthopedics revenues increased 5.7% from the prior-year quarter's level, while international sales increased 5.8%.

General Surgery

Revenues in the segment totaled $99.4 million, up 8.6% year over year. Per management, growth was driven by a strong product portfolio.

Domestically, General Surgery sales improved 15.5% year over year and international sales increased 1.8%.

Sales by Geography

Sales in the United States grossed $323.4 million, up 8.6% year over year. International sales climbed 6.4% to $293.8 million.

Margins

Gross profit in the quarter totaled $110.6 million, up 7.9% year over year. Adjusted gross margin was 54.7%, improving 80 basis points (bps).

Operating income came in at $16.7 million, down 14.5% year over year. Operating margin was 5.7%, up 140 bps year over year.

Guidance

CONMED raised sales guidance for 2018. The company expects 2018 revenues in the range of 6.5-7% compared with the previous range of 6-7%..

Full-year earnings are expected between $2.15 and $2.20, reflecting growth of 14-16%.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months.

VGM Scores

At this time, Conmed has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 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

Conmed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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