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NuVasive (NUVA) Earnings and Revenues Beat Estimates in Q2

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NuVasive, Inc. (NUVA - Free Report) delivered second-quarter 2019 adjusted earnings per share (EPS) of 63 cents, reflecting an 8.6% rise from the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate by 12.5%. On a reported basis, EPS came in at 29 cents, highlighting a 31.8% improvement from the year-ago number.

Revenues in the second quarter came in at $292.1 million, up 3.7% on a reported basis (up 4.7% at constant exchange rate or CER) year over year. The top line also beat the Zacks Consensus Estimate by a nominal 0.1%.

Geographical & Segmental Details

In the quarter under review, revenues at the U.S. Spinal Hardware business increased 6.3% year over year to $160.2 million. The revenue upside was driven by solid uptick in case volume and tangible growth in both the XLIF and ALIF franchises, led by continued adoption of NuVasive's X360 system.

Revenues in the U.S. Surgical Support business were $73.9 million in the second quarter, with the growth rate remaining flat year over year. The upside was driven by 6% growth in NuVasive Clinical Services revenues.

NuVasive, Inc. Price, Consensus and EPS Surprise

 

NuVasive, Inc. Price, Consensus and EPS Surprise

NuVasive, Inc. price-consensus-eps-surprise-chart | NuVasive, Inc. Quote

 

Within the Biologics segment, there was a 1% decline in revenues from the year-ago quarter, even though the figure was in line with expectations.

In the second quarter, the company registered international revenues of $57.9 million, reflecting 6.6% year-over-year growth at CER. The EMEA region witnessed a solid uptick, driven by substantial contribution from Italy, Spain and the DACH region.This was offset by sluggish growth in Asia Pacific and Latin America.


Margin Details

In the reported quarter, gross profit improved 4.9% year over year to $214.5 million. Gross profit margin expanded 81 basis points (bps) to 73.4%. Adjusted operating profit rose 0.3% from the year-ago period to $44.1 million. Accordingly, adjusted operating margin contracted 52 bps to 15.1% in the quarter under review.

Operational Update

The company exited the second quarter of 2019 with cash and cash equivalents of $128.4 million, down from $491.7 million at the end of the first quarter. Year to date, net cash provided by operating activities totaled $93.4 million compared with $77.2 million a year ago.

Guidance for 2019

NuVasive reiterated its revenue outlook for 2019 at the range of $1.14-$1.16 billion. The Zacks Consensus Estimate for 2019 revenues is pegged at $1.15 billion, within the company’s guided range. However, the company raised its adjusted EPS for 2019 in the $2.25-2.35 range, compared to the earlier projection of $2.20 -2.30. The Zacks Consensus Estimate for this metric stands at $2.28, within the guided range.

Our Take

NuVasive exited the second quarter of 2019 on a promising note. The company witnessed balanced revenue growth across majority of its key operating segments. Robust sales figures in some of the key international markets buoy optimism. We are also upbeat about the company’s impressive case volume growth in U.S. Hardware business, driven by increased surgeon adoption of lateral single-position surgery and X360 system.

On the flip side, the Biologics business performance and contraction in adjusted operating margin were disappointing.

Zacks Rank & Other Key Picks

NuVasive currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks which posted solid results this earning season are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion beat the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company holds a Zacks Rank #2.

Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Revenues were $1.1 billion, surpassing the Zacks Consensus Estimate of $1.03 billion. The company sports a Zacks Rank #1.

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