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Inogen (INGN) Q4 Earnings Beat Estimates, Rental Revenues Up

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Inogen, Inc. (INGN - Free Report) reported fourth-quarter 2018 earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 25 cents. The bottom line also improved from a net loss of 3 cents per share incurred in the year-ago quarter.

Revenues came in at $86.5 million, which trumped the Zacks Consensus Estimate of $82 million. On a year-over-year basis, the top line climbed 35.7%.

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Segmental Details

Sales revenues amounted to $80.7 million in the quarter under review, up 38.4% on a year-over-year basis.

Rental revenues totaled $5.8 million, up 6.7% on a year-over-year basis.

Inogen, Inc Price and Consensus

 

Revenues by Region and Category

Business-to-business revenues in the United States summed $25.4 million, up 16% on a year-over-year basis. The uptick was primarily driven by increased sales representative headcount and additional consumer advertising. Internationally, this segment recorded revenues of $18.5 million, up 54.5% year over year courtesy of continued adoption from the company’s European partners.

Direct-to-consumer revenues in the United States grossed $36.8 million in the fourth quarter. This reflects an increase of 50.4% from the prior-year quarter. The upside can be attributed to continued adoption by traditional home medical equipment providers and internet resellers. Direct-to-consumer domestic rentals witnessed net revenues of $5.8 million, up 6.7% year over year.

Margins

In the quarter under review, gross profit was $43.6 million, up 41.7% year over year. Gross margin came in at 50.4%, which expanded 220 basis points (bps).

Operating income was $4.8 million, down 8% year over year. Operating margin came in at 5.5% of net revenues, down 260 bps from the prior-year quarter.

Adjusted EBITDA was $10.5 million, down 9.5% on a year-over-year basis.

2019 View

Inogen reiterated its outlook for 2019. Revenues are expected between $430 million and $440 million, representing 20.1-22.9% growth over 2018. The mid-point of $435 million is below the Zacks Consensus Estimate of $436 million.

Full-year adjusted EBITDA is projected between $67 million and $71 million, representing 9.3-15.9% growth year over year.

Inogen lowered its full-year GAAP net income guidance range to $40-$44 million from the previously-projected band of $48-$52 million.

Wrapping Up

Inogen ended the fourth quarter on a solid note, delivering better-than-expected performance. Solid business-to-business revenues also buoy optimism. These apart, the company’s direct-to-consumer unit performed exceedingly well in the quarter. In fact, management expects this particular unit to be the fastest growing one in 2019.

This Zacks Rank #3 (Hold) company also remains optimistic about its international revenues, which witnessed solid growth in Europe during the fourth quarter. Inogen reiterated its guidance for 2019. A considerable expansion in gross margin is an added positive.

On the flip side, Inogen’s rental revenues declined on a year-over-year basis in the fourth quarter. In fact, the company expects rental revenues to grow modestly in 2019. Moreover, operating margin contraction is worrisome. Rising operating expenses are concerning as well.

Earnings of MedTech Majors at a Glance

Some better-ranked MedTech stocks that delivered solid results in the respective quarters are Varian Medical Systems , AngioDynamics (ANGO - Free Report) and CONMED Corporation (CNMD - Free Report) .

Varian reported first-quarter fiscal 2019 adjusted earnings per share (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 (Buy).

AngioDynamics’ second-quarter fiscal 2019 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 sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CONMED delivered fourth-quarter 2018 adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million exceeded the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.

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