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Penumbra (PEN) Earnings and Revenues Beat Estimates in Q4

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Penumbra, Inc. (PEN - Free Report) reported fourth-quarter 2018 earnings per share (EPS) of 13 cents, up 30% year over year. The figure surpassed the Zacks Consensus Estimate of 11 cents by 18.2%. However, the stock movement does not reflect the company’s promising earnings results as it lost 4.2% to close at $140.52 on Mar 1 since the release.

The company reported 2018 adjusted earnings of 51 cents, beating the Zacks Consensus Estimate by 6.3%. The figure also compares favorably with the year-ago loss of a penny.

Revenues in the quarter rose 25.8% year over year (up 26.9% at constant exchange rate or CER) to $120.8 million, exceeding the Zacks Consensus Estimate of $114.6 million.

Net revenues in 2018 totaled $444.9 million, outpacing the Zacks Consensus Estimate of $438.7 million. The figure also improved 33.3% (up 32.2% at CER) from the year-ago level.

Penumbra, Inc. Price, Consensus and EPS Surprise

 

On a geographic basis, fourth-quarter revenues in the United States (representing 67% of total sales) grossed $80.6 million, up 30.9% from the year-ago quarter (same at CER). Meanwhile, international sales (33% of total sales) advanced 16.6% year over year (up 19.7% at CER) to $40.1 million.

Going by product category, revenues from neuro products grew 9.9% (up 11.2% at CER) to $74 million in the quarter under review. Revenues from peripheral vascular product business rose to $46.8 million in the fourth quarter, reflecting an increase of 62.8% (up 63.6% at CER) year over year.

Operational Update

Penumbra’s fourth-quarter gross margin was 65.2%, reflecting a 110-basis point (bps) contraction year over year. Gross profit rose 23.5%.

Research and development expenses totaled $10.9 million, up 29.8% year over year, while sales, general and administrative expenses amounted to $61.2 million, up 18.8%. Operating profit in the reported quarter came in at $6.7 million, up 71.8% year over year.

Financial Update

Penumbra exited 2018 with cash and cash equivalents of $67.9 million as compared with $50.6 million at the end of 2017.

Outlook

Penumbra has provided guidance for 2019 revenues. The company expects total revenues in the range of $525-$535 million. The Zacks Consensus Estimate of $529.7 million is within the guided range.

Our Take

Penumbra exited fourth-quarter 2018 with better-than-expected results. The year-over-year comparison of earnings was favorable. Moreover, the company witnessed strong growth across all geographies and product lines. The company is focusing on product innovation through research and development. The management also seems to be excited about the launch of the peripheral embolization products into new international markets.

Penumbra is an active player in the fast-growing interventional therapies space. In fact, the company’s products primarily cater to the unmet clinical needs in two major markets — neuro and peripheral vascular.

Zacks Rank & Other Key Picks

Penumbra has a Zacks Rank #2 (Buy).

Other top-ranked stocks that posted solid quarterly results are Varian Medical Systems (VAR - Free Report) , AngioDynamics (ANGO - Free Report) and CONMED Corporation (CNMD - Free Report) . 

Varian reported fiscal first-quarter adjusted EPS of $1.06, in line with the Zacks Consensus Estimate. Revenues of $741 million outpaced the consensus mark of $717.9 million. The stock has a Zacks Rank #2.

AngioDynamics’ fiscal second-quarter adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, which surpassed the consensus estimate by 2.9%. The stock has a Zacks Rank #2. You can see the complete list of today’s Zacks #1  Rank (Strong Buy) stocks here.

CONMED delivered fourth-quarter adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million beat the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.

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