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.
Globus Medical (GMED) Q1 Earnings Miss Mark, Margins Weak
Read MoreHide Full Article
Globus Medical, Inc. (GMED - Free Report) reported first-quarter 2019 adjusted earnings per share (EPS) of 36 cents, missing both the Zacks Consensus Estimate and the year-ago figure by 12.2%.
On a reported basis, the company registered earnings of 33 cents per share, translating to a 15.4% decline from the year-ago quarter.
Revenue Details
First-quarter 2019 worldwide sales summed $182.9 billion, up 4.9% (up 5.7% at constant exchange rate or CER) year over year. The figure, however, lagged the Zacks Consensus Estimate of $186 million. Also, net sales totaled $713 million in the period, up 12.1% year over year.
During the quarter under review, sales generated in the United States including robotic inched up 1.3% year over year. Quarterly seasonality and longer sales cycles dampened robotic sales in the reported period.
Globus Medical, Inc. Price, Consensus and EPS Surprise
International sales rose 23% from the year-earlier quarter (up 27.9% at CER).
Musculoskeletal solutions products generated revenues of $175.8 million, up 8.7% year over year. Enabling Technologies products revenues were $7.2 million in the quarter, representing a 44% decline from the prior-year period.
Margins
Gross margin came in at 77.1%, inducing a contraction of 110 bps in the first quarter. Selling, general and administrative expenses were up 13.3% to $85.7 million. Further, research and development expenses escalated 275.2% to $47.6 million. Adjusted operating margin declined a massive 2333 bps to 4.2% during the quarter under consideration from the year-ago level of 27.6%.
Cash Position
Globus Medical exited the first quarter with cash and cash equivalents and short-term marketable securities of $320.7 million compared with $339.8 million in 2018. For the first quarter, net cash provided by the operating activities was $39.2 million compared with $52.3 million a year ago.
2019 Guidance
The company reaffirmed its 2019 revenue and adjusted EPS guidance as follows:
Sales in 2019 are still projected to be $770 million. The Zacks Consensus Estimate for revenues is pegged at $769.8 million.
Adjusted EPS for 2019 is once again expected at $1.72. The Zacks Consensus Estimate for the metric is currently stands at $1.71 per share.
Our Take
Globus Medical suffered a dismal first-quarter performance with both earnings and revenues falling short of the respective Zacks Consensus Estimates. Per the company, the first quarter of the year is typically challenging seasonwise for capital equipment, which grossly impacted sales during the quarter. On a positive note, US spine business grew 6%, significantly above the overall market.
However, escalating costs and expenses put immense pressure on the company’s bottom line.
Stryker delivered first-quarter 2019 adjusted EPS of $1.88, beating the Zacks Consensus Estimate by 2.2%. Meanwhile, revenues of $3.52 billion matched the Zacks Consensus Estimate.
Abbott reported first-quarter 2019 adjusted EPS of 63 cents, topping the Zacks Consensus Estimate by 3.3%. Further, first-quarter worldwide sales came in at $7.54 billion, higher than the consensus estimate of $7.47 billion.
CONMED posted first-quarter 2019 adjusted EPS of 57 cents, exceeding the Zacks Consensus Estimate of 54 cents. Revenues also summed $218.4 million, outpacing the consensus mark of $213 million.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
Globus Medical (GMED) Q1 Earnings Miss Mark, Margins Weak
Globus Medical, Inc. (GMED - Free Report) reported first-quarter 2019 adjusted earnings per share (EPS) of 36 cents, missing both the Zacks Consensus Estimate and the year-ago figure by 12.2%.
On a reported basis, the company registered earnings of 33 cents per share, translating to a 15.4% decline from the year-ago quarter.
Revenue Details
First-quarter 2019 worldwide sales summed $182.9 billion, up 4.9% (up 5.7% at constant exchange rate or CER) year over year. The figure, however, lagged the Zacks Consensus Estimate of $186 million. Also, net sales totaled $713 million in the period, up 12.1% year over year.
During the quarter under review, sales generated in the United States including robotic inched up 1.3% year over year. Quarterly seasonality and longer sales cycles dampened robotic sales in the reported period.
Globus Medical, Inc. Price, Consensus and EPS Surprise
Globus Medical, Inc. Price, Consensus and EPS Surprise | Globus Medical, Inc. Quote
International sales rose 23% from the year-earlier quarter (up 27.9% at CER).
Musculoskeletal solutions products generated revenues of $175.8 million, up 8.7% year over year. Enabling Technologies products revenues were $7.2 million in the quarter, representing a 44% decline from the prior-year period.
Margins
Gross margin came in at 77.1%, inducing a contraction of 110 bps in the first quarter. Selling, general and administrative expenses were up 13.3% to $85.7 million. Further, research and development expenses escalated 275.2% to $47.6 million. Adjusted operating margin declined a massive 2333 bps to 4.2% during the quarter under consideration from the year-ago level of 27.6%.
Cash Position
Globus Medical exited the first quarter with cash and cash equivalents and short-term marketable securities of $320.7 million compared with $339.8 million in 2018. For the first quarter, net cash provided by the operating activities was $39.2 million compared with $52.3 million a year ago.
2019 Guidance
The company reaffirmed its 2019 revenue and adjusted EPS guidance as follows:
Sales in 2019 are still projected to be $770 million. The Zacks Consensus Estimate for revenues is pegged at $769.8 million.
Adjusted EPS for 2019 is once again expected at $1.72. The Zacks Consensus Estimate for the metric is currently stands at $1.71 per share.
Our Take
Globus Medical suffered a dismal first-quarter performance with both earnings and revenues falling short of the respective Zacks Consensus Estimates. Per the company, the first quarter of the year is typically challenging seasonwise for capital equipment, which grossly impacted sales during the quarter. On a positive note, US spine business grew 6%, significantly above the overall market.
However, escalating costs and expenses put immense pressure on the company’s bottom line.
Zacks Rank & Other Key Picks
Globus Medical carries a Zacks Rank #2 (Buy). Some other top-ranked stocks boasting solid results this reporting cycle are Stryker Corporation (SYK - Free Report) , Abbott Laboratories (ABT - Free Report) and CONMED Corporation (CNMD - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker delivered first-quarter 2019 adjusted EPS of $1.88, beating the Zacks Consensus Estimate by 2.2%. Meanwhile, revenues of $3.52 billion matched the Zacks Consensus Estimate.
Abbott reported first-quarter 2019 adjusted EPS of 63 cents, topping the Zacks Consensus Estimate by 3.3%. Further, first-quarter worldwide sales came in at $7.54 billion, higher than the consensus estimate of $7.47 billion.
CONMED posted first-quarter 2019 adjusted EPS of 57 cents, exceeding the Zacks Consensus Estimate of 54 cents. Revenues also summed $218.4 million, outpacing the consensus mark of $213 million.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>